Analysis And Reform Research On The Disadvantages Of Current Individual Income Tax Mode In China

China’s individual income tax has adopted the classification mode since its beginning of levy. That tax pattern is feasible in the early stage of imposing the income tax. With the rapid development of our country’s economy, great increase of the income level and the universality of income diversification, the disadvantage of current income tax model:its unfairness becomes more and more prominent. Income inequality, the gap between rich and poor as well as the income equity are growing in the recent 10 years or so. Therefore, the reform of the pattern of individual income taxation is imperative.This article is divided into seven chapters. The first chapter and the second chapter are the background and literature review. From the third to the seventh chapter is the main part of the paper. Among them, the third chapter is the basic theory analysis; The fourth chapter and the fifth chapter are the analysis of disadvantages in current tax model and the empirical estimates; The sixth chapter is the design of China’s taxation model reform. The seventh part shows supportive measures of reform implementations. The last part is conclusion.Chapter 1 is "introduction". It mainly introduced the background and significance of this topic, explaining the research ideas, research framework as well as research methods, and pointing out the innovation of the article.Chapter 2 is "literature review", made a comb of research on taxation model in domestic and foreign countries, from the way of theory and practice.. For theory overview part, first of all, the article carried on the induction and summary of two elements that are used to judge taxation mode both at home and abroad:efficiency and fairness; Secondly it analyzed and summarized an important element that must be considered in taxation mode design:the progressive theory research; Finally the chapter summarized and analyzed the theory study of taxation pattern. Tax practice part mainly reviewed the research on taxation mode selection and personal income tax loss measurement.Chapter 3 is "economic explanation of individual income tax mode". To begin with, the paper carried on a theoretical analysis and comparison on three kinds of taxation mode of individual income tax, and summarized the result in a form with all advantages and disadvantages of the three kinds of taxation mode. Secondly it analyzed the relationship between classified income and comprehensive income, and illustrated the comprehensive income tax mode is actually still based on the classification of income. This further demonstrated the close relationship between two tax models, and analyzed the difference between classified income and comprehensive income. Then this paper carried on a thorough analysis on theory of total taxable income and net taxable income.Chapter 4 is "disadvantages in classified income tax mode-lack of fairness". This chapter systematically analyzed all sorts of problems existing in the current classification of income tax mode, including the range of tax base is narrow, the structure of tax rate is complex and other problems related to tax rate, unreasonable expense deduction, weak tax consciousness of residents etc. With detailed case, it finally further verified the unfairness caused by those problems in classified income taxation.Chapter 5 is "disadvantages in classified income tax mode-serious tax evasion". First of all, this chapter analyzed the reasons of the serious tax erosion problem under classified income tax mode, including lack of fairness in tax classification model itself, the characteristics of classified pattern design, complexity and disorder in tax preference and the low-efficiency in its collection mode, etc. In the end, the paper used various methods to calculate our country’s tax loss scale in recent years, and found that the tax loss rate in individual income tax is very high, also further illustrated the necessity of conducting taxation mode reform.Chapter 6 is "Reform proposal of China’s taxation mode". This chapter is the core and the highlight of the full text. The author first analyzed the influence factors of tax mode selection and the historical development in taxation pattern practices all over the world; Then combing with international taxation mode development rule, the author put forward a gradual reform plan of the classified comprehensive tax pattern, including definition of income items(which is suitable for comprehensive taxation model); the definition of suitable crowd reform on expense deduction project, tax rate and the application unit.Chapter 7 is "Supportive measures on the implementation of taxation mode reform". The article put forward the collection mode reform, which is matching with our tax mode reform. After that it analyzed the taxation levy management conditions and supportive measures adapted to the reform of collection, including the construction of information systems, incentive and restraint mechanisms, tax collection and law enforcement personnel as well as personal credit information system, etc.The last part is the summary, which includes three conclusions:Firstly, the present classification model of income tax in our country caused various problems and eventually leaded to extreme unfairness in taxation; Secondly, China’s loss scale of personal income tax is huge; Thirdly, our country should adopt classification of comprehensive income tax mode in the near future, and conduct the reform crowds by crowds, items by items and step by step.