Research On The Deduction Effect And Optimization Of Special Additional Deduction Of Personal Income Tax

Personal income tax is a tax on the income obtained by individuals.It is directly related to the disposable income of each taxpayer and closely related to people's lives.It brings direct tax pain to taxpayers and has been receiving public attention.The new personal income tax law,which was officially implemented from January 1,2019,has raised the basic deduction standard from 3,500 yuan to 5,000 yuan.In the taxation model,the taxpayer's salary income,labor service income,manuscript income and royalties income has included in the comprehensive income for year-end settlement,which is a step forward from the classification to the syndrome.The biggest highlight of the personal income tax reform is the addition of special additional deductions,which deducts the pays of child education,continuing education,housing loan interest,housing rent,critical illness medical care,and supporting elders.This system will reduce the taxpayer's tax burden and allow taxpayers with the same tax capacity to pay the same amount of tax,which is in line with the principle of tax fairness.Then the special additional deduction system will implement what kind of tax reduction effect,how many number of taxpayers will acquire the tax reduction and the taxpayers of which class are the biggest beneficiaries of the special additional deduction system,how can the special additional deduction system be further optimized and perfection,these issues are the focus of this article.This paper uses the data from the Chinese Family Panel Studies(CFPS)2018and questionnaire surveys to measure and study the tax reduction effect of special additional deductions for personal income tax,and then proposes optimization suggestions for the special additional deduction system.The research on the effects of special additional deductions for personal income tax deduction and tax system optimization is divided into five chapters.The first chapter introduces the background of this topic,the significance of the topic,the literature review,the research ideas,the research methods,the innovations and the shortcomings.The second chapter introduces the theory of special additional deductions for personal income tax and China's current special additional deduction system.This chapter starts from the concept of "income" and explains that "income" is the increase in net assets and the result of income minus expenses.The concept of fee deduction further introduces the theoretical basis of fee deduction,the classification of feededuction,the method of fee deduction,and the significance of fee deduction,and then explains China's current fee deduction system and special additional deduction system.The third chapter is to use the data of the Chinese Family Panel Studies(CFPS)2018 to measure the tax reduction effect of special additional deductions.It mainly analyzes the intensity of tax reductions of special additional deductions and the beneficiaries.The tax reduction intensity of the special additional deduction was measured from four aspects: the scope of tax reduction,the absolute amount of tax reduction,the change in tax burden,and the tax reduction ratio.It is found that the average tax paid per person is about 1,000 yuan less per year,and the tax reduction effect is quite significant,but the proportion of people who can be covered by the special tax deduction is not very high.The analysis of the beneficiary group is to group the taxpayers who have earned income according to income class,age stage and region.Calculate each group of taxpayers' average tax deductions,tax reduction ratios and changes in tax burden.Special additional deductions have the largest tax reduction effect on the second-higher income group,but fewer people have the effect of tax reduction.At the age stage,special additional deductions have the largest tax reduction effect on youth,and youth groups also have The group with the largest number of people shows that the effect is good.In terms of regions,the average tax reductions in each region are relatively concentrated,and the gap is not very large.Relatively speaking,the average tax reductions in the eastern coastal regions are slightly higher.The forth chapter uses the data from the questionnaire survey conducted by the author to re-evaluate the tax reduction effect of special additional deductions,compares and analyzes the conclusions drawn in Chapter 3,and proposes problems and optimization directions for the special additional deduction system.In the end,it is believed that those who enjoy special additional deductions are more effective in terms of tax deductions and tax reduction ratios.The number of people who enjoy special additional deductions of the child education and supporting elders is the largest.From the perspective of income class,the second highest income group,that is,the year Taxpayers with incomes of about 100,000 yuan have the highest percentage of tax reductions.From the perspective of the changes in the tax burden of different income groups,as taxpayers' incomes increase,special additional deductions can reduce the tax burden on taxpayers.The effect has also increased,which isactually not conducive to the effect of personal income tax on regulating income distribution.From the perspective of age,youth groups,especially young people aged30-45,enjoy the highest percentage of special additional deductions.With regard to the optimization of the tax system,the applicable population of the special additional deduction system should be further widened.The fifth chapter puts forward suggestions for optimization of China's current special additional deduction system from the deduction items,deduction scope and deduction standard based on the international practice of the deduction system and the results of questionnaire surveys.