China's Personal Income Tax Sources

Personal income has been the focus of our society for its close relation with everyone's own interest, up from all the relevant administration, down to the average people. Although everyone has different idea about how the personal income should be distributed among all the people, it's a fact without any doubt that the gap of personal income among the citizens of China is getting larger and larger. So that the huge gap of personal income will do a great deal of harm to the everlasting economic development of our country. Great hope has been attached to personal income tax (PIT for short later) as one of the executive ways to deal with that big problem for its attribute to allocating income fairly.Although the income of PIT has been rising in recent years, its effect in allocating income fairly is not as much as we had hoped, and we can even find that its effect has been distorted since the people with about 80 percent of the whole wealth, proportion to less than 20 percent of the whole population, only handed in less than 10 percent of PIT, which dissatisfied many people, especially those who gain income only by fixed salary. How does this happen? Are there any problems profound behind the scenery? In order to solve all the puzzles and complaints, I write this graduate essay focusing on the analysis of the derivation of PIT.The whole essay is divided into four parts. In the first part, I introduced some relevant theories about analysis of derivation of taxes, including the concepts and categories of derivation of taxes and analysis of derivation of taxes, the imperativeness of analysis of derivation of taxes and the premise of it, etc.The second part, the detailed analysis of the derivation of PIT in China, is one of the most important part of the essay. The whole analysis is divided into total analysis of derivation of PIT and structural analysis of derivation of PIT. In the total analysis, I have mentioned the rising trend of PIT and the income erosion of PIT, and in the structural analysis, I have analyzed the structural distribution of derivation of PIT in different tax items, regions, industries, income classes and property ownership.In the third part, I put forward some conclusions drawn from what I have analyzed above. These conclusions are as follows: the income of PIT is in a dramatic rise but the erosion of it is big at the same time; there are many shortcomings in the administration of PIT; the model in levying PIT is not very reasonable; the informational structure of taxation is not very successful; there is much rising talent in PIT; the distribution of derivation of PIT is very complex and PIT has not played its role very well yet.Some polices and advises are mentioned in the fourth part of the essay according to the problems from the third part, mainly about PIT itself and some relevant measures outside of PIT, and PIT itself includes the system of PIT and the administration of PIT. The detailed points are: enlarging the tax base of PIT, reformation of the model of PIT, taxation indexation, more effective propaganda of tax law, rising the quality of administration, more restrict administration of cash trade, nominal system of personal deposit and system of property registration, more channels to get taxation information to get the taxation environment better and so on.