Research On The Reform Of My Country’s Individual Income Tax System From The Perspective Of Common Prosperity

Since the reform and opening up,China’s economy has shown a new dynamic development.1978 to 2021,China’s GDP has increased from 300 billion yuan to 90 trillion yuan,leaping to the second place in the world.Behind China’s rapid economic and social development,the problems of large gap between the rich and the poor and unfair income distribution have become increasingly prominent,and the Gini coefficient of residents’ income has basically remained at a high alert level of over 0.4,which has aroused great concern from all walks of life.At present,the task of building a strong socialist modern country has been put on the agenda,and common prosperity has become a new historical task.Improving the income distribution pattern and achieving the goal of common prosperity are the key challenges that China needs to study and overcome at this stage.Individual income tax has the role of "internal stabilizer" and can play a key role in regulating the income distribution pattern,narrowing the income distribution gap,promoting social justice and realizing common prosperity.However,at the present stage,the design of China’s personal income tax system still deviates from the goal of common prosperity,and the ability of personal tax to "adjust the high and benefit the low and expand the middle" still needs to be strengthened.Therefore,under the goal of common prosperity,it is necessary to accelerate the pace of deepening reform of the personal tax system.Based on the above background,this paper firstly compares the domestic and foreign research results,and analyzes the mechanism of personal income tax to promote common prosperity with the theoretical guidance of common prosperity theory,optimal income tax theory and tax equity principle,and the adjustment role of personal income tax in the primary distribution,redistribution and third distribution.Secondly,this paper compares the development history of China’s personal income tax reform and summarizes the characteristics of China’s personal income tax reform in history,and empirically tests the effect of China’s personal tax reform based on MT index and common wealth index.It is found that the personal income tax reform has enhanced the income distribution adjustment function of personal tax and has the effect of promoting common wealth,but the effect is limited.The following problems exist in China’s individual income tax system: firstly,the tax burden is unfair under the combined comprehensive and classified tax system model,the tax rate setting is not reasonable enough,the accuracy of expense deduction items needs to be improved,the coverage of levy and administration is not complete,and the tax collection and administration capacity needs to be improved,which are the key factors restricting China’s individual tax to promote the realization of common prosperity.Then,this paper further compares and analyzes the characteristics of personal taxation systems in some developed and developing countries,and summarizes the reform lessons from the perspective of common wealth.Finally,based on China’s national conditions,the paper discusses the policy suggestions to deepen the reform of individual income tax system and promote the realization of common wealth from several perspectives,taking into account the problems of individual tax system from the perspective of common wealth.Specifically,one is to establish the tax reform concept of common wealth;two is to gradually move toward a comprehensive tax system with stronger regulatory functions;three is to optimize the personal tax rate structure;four is to improve the accuracy of personal tax expense deduction items;five is to expand the coverage of personal tax levy;six is to consolidate the collection and management capacity and improve the collection and management efficiency.