Analysis Of The Income Distribution Effect Of China's Personal Income Tax

Chinese economic reform has passed forty years.During this period,socio-economic development has reached new heights.China's GDP has steadily ranked the second in the world since 2010.However,according to data released by the World Bank,China's Gini coeficient has exceeded the warning line of 0.4 in the past 16 years,which indicates that there is a huge gap of income distribution and a prominent gap between the rich and the poor in China.In this regard,the government should take various measures to adjust.As a direct tax that directly levies taxpayer income,person al income tax is progressive and plays an irreplaceable role in regulating income distribution.The new personal income tax policy implemented in China for the first time realizes a comprehensive and classified tax collection model,so it is of great significance to study the effect of this policy.In the introduction and theory chapters,this paper sorts and summarizes the relevant research literature domestically and overseas,and then elaborates the relevant theory of income distribution of personal income tax regulation.In the main calculation and analysis chapter,based on the national statistical yearbook data,this paper analyzes the income distribution gap of the national residents,and then based on the income data of urban residents in Shaanxi Province from 2003 to 2017,and use the non-equal grouping method to calculate the Gini coefficient.According to the calculation results,it is found that the Gini coefficient is slowly declining but the value is still about 0.4.Therefore,although the income distribution gap of residents in Shaanxi Province is gradually narrowing,it still needs attention.This paper emphasizes that,based on the policy background of the personal income tax reform in 2018,using data from the Shaanxi Province in the CFPS2016 survey to perform macro-indicator calculations and micro-effect analysis of income distribution effects.The chapter calculates the macro effects such as MT index,horizontal fairness effect,vertical fairness effect,and the progressive effect have been analyzed.It is concluded that increasing the cost deduction and expanding the tax rate gap are not conducive to the redistribution of income for personal income tax.Increasing the special addition al deduction significantly improves the income redistribution effect.At the micro level,the income structure,personal tax payment and special additional deductions are calculated and analyzed.It is concluded that the new personal tax significantly reduces the tax burden of residents at low and middle income levels,and the difference between the special additional deductions fitted by each income group is small.Based on the results of calculation and analysis,this paper proposes the factors that restrict the effect of personal income tax on adjusting the income distribution effect.It is elaborated from the three levels,the state,the enterprise,and the personal.National level shows that comprehensive tax scope is too small,Taxation scope is not comprehensive,Progressive tax rate structure needs to be optimized,and personal income tax collection and management is inefficient.The enterprise level shows that the professional skills of financial staff needs to be improved and personal tax planning needs to be adjusted.The personal level is mainly reflected in the level of citizen tax compliance and the difficulty of tax declaration.On the basis of summarizing and drawing on international experience,this paper puts forward corresponding suggestions for strengthening the effect of personal income tax income distribution.The national level recommendations that use the family as the tax unit,use the back-listing method to expand the tax base,formulate reasonable deduction standards,and optimize the tax structure of personal income tax and strengthen the management of personal income tax collection.The enterprise level recommendations that strengthen the continuing education of financial staff and the re-establish the salary system.The personal level recommended that people should learn relevant tax laws actively and taxpayers and withholding agents cross check tax declaration information,etc.