A Study On The Equity Of China’s Individual Tax Law

Individual income tax is an important tax system between the state and individuals on the wealth created by individuals.It has an important role in promoting the fairness of social income distribution.In legislation,the principle of quantitative energy tax should be taken as the basic guidance in order to play its regulatory function of income distribution.After the current personal income Tax Law in China has revised the personal income tax in 2018,the individual income tax law has made a great breakthrough in tax fairness.But looking at the details is still not difficult to find that some of the current tax laws are controversial:On the one hand,the proportion of personal income tax in China’s personal income tax has been high in recent years,and it is at the top of the proportion of personal income tax for the year round.On the contrary,the "property transfer income",as a negative income,accounts for a much lower proportion in the personal income tax.From the perspective of tax fairness,the working class includes the most dominant labor group in the whole society.Among such groups,low,middle and low-income people account for a relatively high proportion,and mainly rely on labor income.Groups who rely on negative income are more rich,who are more powerful than taxes.Therefore,the phenomenon that the highest proportion of individual income tax itself belongs to the phenomenon of unfair personal income tax,which reflects the current institutional situation of the Individual Income Tax Law with heavy tax on labor income tax and light tax on capital income.The reason for this phenomenon is that the current personal income tax on the "comprehensive income" is unreasonable,and then there are no relevant provisions on the "capital gains tax" in China.Even at the factual level,China’s personal income tax has taxed the income of "capital gains",but due to the imperfect laws and regulations and the lack of clear definition of "capital gains" and other reasons,the tax on "capital gains" is always relatively light.On the other hand,although the Individual Income Tax Law has currently introduced the "comprehensive income" category,there are certain problems in the setting of the "comprehensive income" itself.According to the current tax law,wages,remuneration,labor remuneration and other four income into "comprehensive income" combined tax it is not difficult to see that "comprehensive income" classification of income is combined income tax,but about whether the "royalties" belong to labor income and whether should be individual personal income into "comprehensive income" class are controversial.In addition,there are also relevant fairness issues in the details of the fee deduction standard for individual income tax.Due to the large differentiation of China’s regional economic development,unbalanced urban and rural development,and the actual situation between individual taxpayers,simply adopting the national "one-size-fits-all" standard for personal income tax fee deduction is bound to be unfair to some regions and taxpayers.Therefore,in view of the tax injustice in the above tax laws and combined with the current goal of common prosperity proposed by the central government,we believe that China’s individual tax laws should be revised from three aspects in the future.First,we should further define the "comprehensive income" and improve the relevant content.Detailed adjustments can be further made in the relevant setting of tax rate and level distance;second,in the cost deduction standard,in addition to the local personal income tax adjustment through local governments at all levels,special cost reduction items can also be added.