Research On China's Individual Income Tax Expense Deduction Standard

As a typical direct tax,individual income tax is not easy to be transferred,and is directly borne by the individual who gets taxable income.Therefore,it is known as "good tax".The collection of individual income tax is closely related to the personal interests of taxpayers.The rapid development of economy directly leads to the rising living standard of people,and the income gap between individuals is also gradually expanding.Some problems in the personal income tax system are gradually emerging,especially the unfairness and unreasonableness of the expense deduction standard of personal income tax.The proposed reform of the expense deduction standard for personal income tax has once again come into focus at the 13 th National People's Congress in 2018.The introduction of the new policy enables taxpayers to enjoy the tax expense deduction policy reform dividends.From October 1,2018,the monthly fee deduction standard of 5,000 yuan will be implemented and the new tax rate table will be applied.Six special additional deduction policies will be officially implemented from January 1,2019.Based on the background of the 2018 personal income tax reform,this paper studies the standards of personal income tax expense deduction proposed in the reform.Personal income tax is an important tool to adjust income distribution and promote fairness.If there is something unreasonable in the standard of personal income tax expense deduction,it is not good for it to play the role of adjusting income distribution.The personal income tax reform in 2018 is a significant progress in China's tax reform process,but there are also some imperfections.China's vast territory,economic development in different regions is not the same,the price level is not the same,the implementation of a unified national standard deduction is unfair;In addition,the six special additional expenses for the details of the deduction still need to be improved;The new policy can indeed reduce the tax burden of middle and low-income people,but it is difficult to adjust the tax burden of high-income people.In view of the above problems,combined with the successful experience of foreign legislation,this paper puts forward the following suggestions: One is the formation of expense deduction automatic adjustment mechanism,and realize the expense deduction standard indexation adjustment.Second,the standards for the deduction of special additional expenses are refined and standardized.Specific Suggestions are put forward from six aspects: deduction of children's education expenses,deduction of continuing education expenses,deduction of medical expensesfor serious diseases,deduction of expenses for supporting the elderly,deduction of housing rent expenses and deduction of interest expenses on house purchase loans.At the same time,it is suggested to add expense deduction for special taxpayers and expense deduction for accidental loss.Third,in order to ensure the smooth implementation of the standard of expense deduction,the related supporting facilities should be improved through the implementation of real-name registration system and the establishment of tax-related information sharing.Fourth,we need to raise taxpayers' awareness of paying taxes.The standard of personal income tax expense deduction should be gradually improved along with the improvement of tax collection and management level in China and the continuous reform of personal income tax system,keeping pace with the pace of social changes,so as to maximize its function of adjusting income distribution and promote social equity.