Research On Individual Income Tax Policy Of Expanding The Proportion Of Middle Income Group

At present,China is constantly reforming and improving the income distribution system,and the increase of the proportion of middle-income group in China comes from the continuous increase of the overall income level of the residents,and there is still much room for optimizing the personal income tax to promote the proportion of middle-income group.This thesis adopts the median income division method to measure the proportion of middle-income groups in urban areas in China;analyzes the factors of improving the personal income tax system model,tax base,tax rate structure and tax collection and administration;and analyzes how the personal income tax plays a regulating role in redistribution and how to expand the proportion of middle-income groups.This thesis conducts an empirical analysis of the impact of individual income tax on the proportion of middle-income groups.This thesis uses the progressivity measure to obtain the progressivity of individual income tax in China;selects the progressivity of individual income tax as the proxy variable of individual income tax,proposes the research hypothesis and constructs the VAR model of individual income tax on the proportion of middle-income group;tests the research hypothesis and analyzes the impact of individual income tax on the proportion of middle-income group.The results of the study show that personal income tax can promote the expansion of middle-income group in China,and personal income tax has a positive effect on the expansion of middle-income group in the short term,but the promotion effect is not significant in the long term.Based on the theoretical and empirical findings,the personal income tax has the problems of small income scale,unreasonable main tax targets,mismatch between the actual tax burden and income level of high income earners,inflexible exemption amount and narrow scope of special additional deductions under the perspective of "expanding the middle".The degree of progressivity of personal income tax is an important endogenous factor in the formation of the proportion of middle-income groups.The degree of progressivity of personal income tax is an important parameter affecting the proportion of middle-income groups.This thesis proposes the optimization of personal income tax based on expanding the proportion of middle-income groups from three perspectives:(1)reducing the personal income tax burden of low-income groups;(2)reducing the personal income tax burden of low-income groups;(3)reducing the personal income tax burden of middle-income groups;and(4)reducing the personal income tax burden of middle-income groups.(2)optimize the tax rate design and tax preferential policies;(3)strengthen the personal income tax collection and management for high-income groups.