A Research On The Improvement Of Special Additional Deduction System For Supporting The Elderly

In 2018,six special additional deductions were added for the first time in the individual income tax reform,covering all aspects of the cost of living of taxpayers.Eligible education,medical care,pension,housing and other expenses can be deducted before tax to effectively reduce the tax burden of taxpayers.Under the background of the acceleration of the aging process in China,this paper concentrate on the problems existing in the implementation of the special additional deduction system for supporting the elderly,and draws lessons from the experience of the pre tax deduction of the expenses for supporting the elderly abroad,so as to provide suggestions for the next step of system improvement,so as to alleviate the pressure of social and family pension.In the early stage of the implementation of the special additional deduction system for supporting the elderly,it is feasible to adopt the quota deduction and simplify the collection and management process,and fully consider the principle of tax efficiency.However,with the dominance of the one-child policy implemented for more than 30 years,more and more "4+2+1" families will face the pressure of providing for the aged.Each taxpayer’s family structure is different,and the number,age,income,health and other conditions of the dependants are different,which makes the difference of the actual payment of the dependants larger,and the fixed deduction method is not conducive to tax fairness.The expenses for supporting the elderly belong to comprehensive expenses,which include not only the living expenses with little difference,but also the medical and long-term care expenses with great difference.A single fixed deduction can not meet the needs of fairness and efficiency.In addition,there are some problems,such as the narrow range of supporting objects,the unreasonable allocation method,and the lack of linkage of consumer price index.Through the comparative analysis of the methods of pre tax deduction of overseas personal income tax for supporting the elderly,this paper believes that the next step of reform should follow the principles of both fairness and efficiency,importance and necessity,and step by step.At present,the new tax system has just been established,focusing on the principle of efficiency and implementing a unified standard of fixed deduction.On the basis of the continuous improvement of tax system and collection and management ability,the quota deduction should be changed to the combination of quota and quota.Expand the scope of supporting objects,including not only the taxpayer’s own parents,but also the parents of the spouse without income and the people under 60 who can’t take care of themselves.Use the micro data of CHARLS to investigate the health self-assessment,disability status and disability status of the elderly,and analyze the subsidy situation of the pension system for the elderly in China,with the age of 70 as the definition of the elderly Standards for the elderly:with the increase of the age of the elderly,more expenditure on health is needed.It is suggested to re classify according to the age level,and determine the deduction standards by age groups of 60-69,70 and above.The dependants who can’t take care of themselves need high long-term care costs.In the pilot area of long-term care insurance system,the support pressure of taxpayers is reduced,while in the non pilot area,the support pressure of taxpayers is reduced The long-term care expenses of the disabled elderly are mainly borne by the caregivers themselves,so it is suggested to set different deduction standards for the pilot areas and non pilot areas;the per capita pension income of the residents in China is higher than the per capita consumption expenditure of the residents,that is,the average pension level can meet the basic needs of the daily life of the retired elderly,when the income of the elderly exceeds the per capita pension,the caregivers no special additional deduction can be enjoyed;only one taxpayer is allowed to declare the pre tax deduction of supporting the elderly in each tax year.On the one hand,it is fair to the actual supporting obligors,on the other hand,it can improve the collection efficiency;China has entered the aging era,labor costs are rising rapidly,which leads to the increase of pension costs more than the increase of overall prices,in order to reduce the cost to taxpayers For the adverse effects caused by living,it is suggested to establish a mechanism to dynamically adjust the pre tax deduction of supporting the elderly by referring to the domestic consumer price index.