Research On The Impact Of Personal Income Tax On The International Flow Of Talents

With the deepening of economic globalization and the high-technology industry,the world has entered the era of talents.Talents who master the professional knowledge and skills have flowed freely around the world,which changes the original understanding of the difficulty about labor flow.Many countries have applied various methods to compete for the talents.Taxation,especially the individual income tax,as a direct impact on the disposable income,has played an important role in the policies for talents' introduction.China is now still a developing country and there is still a gap between our needs for talents and the amount of current talents we have now.Also,the individual income tax was recently reformed in China in 2018.Studying the relationship between individual income tax and talents' introduction policies helps us to clarity the functional of China's individual income tax and improve the overall talents' introduction policies.This article starts from the theoretical analysis.By studying the international tax competition theory,manpower flow theory and labor economics theory,a simple model could be established to explain that highly-skilled people would like to choose to flow to the low tax rate and low level of progression countries without considering other factors.However,in the process of analyzing the current situation of the cross-border movement of talents,an obvious tendency that people actually choose these countries which the individual income tax rates are not low could be observed.Based on the above theory and current situation analysis,a model aiming to illustrate the effect has been established.By using data from OECD from 2003 to 2017 to analyze the impact of individual income tax on talent inflows in various countries,it is found that the level of economic development level is significantly positive correlated with the talents' international movement and the average tax rate of high-income group has a negative effect on talents' introductionBesides,by sorting out and summarizing the current preferential policies related to talents' introduction in individual income tax,the most prominent problem is that on one hand,high individual income tax rates and decentralized preferential policies are difficult to achieve the purpose of talents' introduction,and on the other hand,local governments have introduced a large number of tax policies such as tax rebates and tax-free bonuses to attract talents,which undermines tax equity and exacerbates imbalance of regional development.The contradiction has made the individual income tax system not only can not effectively attract talents,but also affects therealization of the function of adjusting income redistribution.Finally,by analyzing and comparing the individual income tax systems of Singapore and America,it is proposed that China should reduce the individual income tax rate,improve the preferential tax policies for talents,and realize the dynamic update of basic deductions to promote the ability to introduce talents.Also,some supporting measures like accelerating the transformation of the comprehensive income tax collection,improving personal anti-tax avoidance and tax collection capacity should be mentioned to accomplish the redistribution of income and help raise financial revenue.