An Analysis Of The Tax-preferential Policy Effect Of China's Individual Tax Delayed Endowment Insurance

The introduction of individual tax deferred old-age insurance is a benefic ia l exploration of the third pillar of China's old-age insurance,which is conducive to the construction of China's multi-level old-age security system and relieves the pressure of the first pillar of the state's pension payment.On April 12,2018,the Ministry of Finance,the General Administration of Taxation and other five ministries and commissions jointly published the Circular on the Pilot Project of Personal Tax Delayed Commercial Old-age Insurance [2018] 22.The pilot policy of Personal Tax Delayed Old-age Insurance was promulgated in Shanghai,Xiamen and Suzhou Industrial Park.Tax-deferred endowment insurance has the advantages of tax incentive,complete accumulation,market operation,flexible choice,simple process and transparent operation.However,the pilot policy also has some limitations and shortcomings,such as single tax-preferential model,limited attractiveness and coverage,and the weak capital market makes it difficult to maintain and increase long-term value.At the same time,combined with the income distribution and the payment of personal income tax in China,the real benefits of personal income tax to the population and its effects need to be explored.On the basis of these problems,this paper establishes an actuarial model of personal income tax for the pilot policy,and calculates the tax-saving effect of different income groups.This paper is divided into five chapters.The following are the basic ideas of the paper.The first chapter is the introduction,which elaborates the background,significance,innovation and shortcomings of this paper,and summarizes the literature review of the predecessors.Chapter two explores the negative impact of the multi-level old-age security system and the lack of the third pillar in China.It is divided into four parts.The first part introduces the current multi-level pension system in China and points out the dilemma faced by each pillar: the first pillar is dominant,the second pillar is still in its infancy and the third pillar is almost blank.The second part analyses the current situation of income distribution of urban employees in China,and shows that there is a big gap between the rich and the poor.At the same time,it makes a detailed calculation of the number of urban employees in each income section in 2017,and concludes that the number of people who pay personal income tax in China is only about 130 million.The third part analyses one by one the newly proposed pilot policies of tax deferred endowment insurance on April 12,2018.The fourth part introduces the operation status of tax deferred old-age insurance in the three pilot projects since the pilot implementatio n on May 1 last year,namely,low premium income and limited coverage of the population.In the third chapter,through the establishment of actuarial model,the preferential effect of tax deferred endowment insurance is analyzed in detail.It is divided into four parts.The first part is the preparation for the construction of actuarial model.It simplifies the real situation and makes the corresponding assumptions and parameter settings.The second part constructs an actuarial model,and presents the actuarial estimates of different gradient income levels in three stages of individual tax deferred endowment insurance,namely,payment period,investment income period and payment period.It can be seen that individual tax deferred pension insurance has a certain tax avoidance effect for high-inco me people,but it is not so "cost-effective" for low-income people.The third part is the comparison of tax avoidance effect of deferred endowment insurance before and after the change of individual tax policy.Through the comparison,it is found that after the change of individual tax policy,the tax preferences enjoyed by individ ua ls are reduced.Finally,the fourth part of the chapter analyses and summarizes the positive and negative effects of the pilot tax preferential policy,and concludes that it has a very positive effect on building a multi-level old-age pension system and coping with the aging crisis in China.At the same time,it can also bring an objective income to insurance companies.But the current single tax preferential policy will also lead to the inequity of social redistribution,resulting in heavy burdens.Negative effects such as regression effect and Matthew effect.Chapter IV elaborates the advanced experience of the third pillar constructio n of the three countries.It is divided into four parts.The first three parts elaborate the specific contents of the private pension pillars in the three countries-IRA system in the United States,individual pension plan in Britain and Lister plan in Germany.They elaborate respectively from three aspects: the overview of private pension,the specific operation mechanism of private pension(including for the population,tax-preferential model,regulatory investment mechanism,etc.),and the effect of private pension.The fourth part summarizes the advanced experience of the first three parts,and concludes the experience of private pension construction in three developed countries and what we can learn from: strengthening private pension constructio n,improving tax preferential policies,and the management mode of "wide path,strong supervision" of pension funds.The fifth chapter is the final conclusion and suggestions.According to the deficiencies of our country and the advanced experience of foreign countries,this paper puts forward some innovative suggestions for the development of the third pillar of our country,such as perfecting the tax preferential model,strengthe ning supervision,effectively linking up the second and third pillars,and adopting an insurance group as a business model,and puts forward some policy suggestions to promote the innovative development of the third pillar of our country's endowment insurance system.There are three innovations in this paper:Firstly,this paper makes a deep analysis of the tax-saving effect of the tax-deferred endowment insurance pilot tax preferential policy proposed in April 2018 on different income groups in China.Secondly,this paper compares the tax-saving effect of the tax deferred endowment insurance pilot tax preferential policies under the new and old personal income tax policies.Finally,this paper innovati ve ly proposes to adopt the differential third pillar preferential subsidy policy for differe nt income groups,so as to expand the actual coverage of the third pillar.