The Research On The Reform Of Personal Income Tax In China

Since the reform and opening up,under the guidance of efficiency and fairness,China's economy has achieved rapid development and the people's income level has been greatly improved.However,with the improvement of people's income level,the gap between rich and poor has also widened rapidly,which is not conducive to the steady and sustainable development of the economy.The report stressed that our country will pay more attention to encouraging diligence and abide by law to become rich.We should expand the middle-income group,adjust the excessive income of the residents,increase the income of low-income residents,and eliminate illegal income to make the distribution of residents' income more equitable.Future economic policy may focus more on the settlement of income distribution.As a typical direct tax,individual income tax can be used to adjust income distribution by taxing people with higher income.However,due to the limitation of the management level,China's individual income tax reform lags behind the economic development,and the function of individual income tax to adjust income distribution is limited.Under the background that the current income gap is more and more serious in our country,the function of individual income tax to adjust income distribution should be paid full attention,our country's personal income tax reform should be conducive to fairness in income distribution.This paper empirically analyzes the regional adjustment effect,industry regulation effect and element regulation effect of current individual income tax on income distribution in China.It is concluded that the individual income tax in China plays a positive regulating effect on regional adjustment.The adjustment effect of individual income tax in industry adjustment is not significant;on regulating factors of urban residents in our country individual income tax income from property tax burden is lower than the salary income individual income tax,wage income undertook the heavy individual income tax.The adjustment of individual income tax to income distribution is realized through tax system.The current tax collection mode of individual income tax in our country is classified collection,which is not conducive to improving the fairness of income distribution.In terms of expense deduction,that the burden is different between different residents is not taken into account.This paper studies the adjustment of individual income tax to income distribution in the United States and Japan,and gives the enlightenment of individual income tax to improve the fairness of income distribution in China.In the end,this paper analyzes the necessity and feasibility of China's individual income tax reform and puts forward that China's individual income tax reform should pay more attention on the function of income distribution adjustment;Give consideration to fairness and efficiency;Foster a middle income class.According to the above direction,this paper puts forward the specific policy Suggestions for China's individual income tax reform.First,reform the individual income tax collection mode,adopt the classification comprehensive taxation model.Second,improve the personal income tax expense deduction standard,increase the special deduction;Third,optimize the tax rate structure,reducing the tax rate and lowering marginal tax rate.Fourth,make the design of tax incentives for charitable donations more reasonable;Fifth,raise the level of tax collection and administration.