A Comparative Study On Individual Income Tax And Its Effects On Income Distribution Between China And The United States

With the deepening development of our county's market reform, wide gap between rich and poor, unfair income distribution is becoming more and more prominent. These problems bring a lot of social contradictions, it influenced the development of economy, also affected the social stability. To solve these problems, need to improve individual income tax system, as one system of government redistribution, it has played a very important role. In contrast, China and the USA are countries with large income gap. However, the public for the fairness of the response is different. With these questions, we need to compare individual income tax and its effects on income distribution between China and the United States, in order to alleviate the situation of big gap, maintain social stability, promote social equity and the development of harmonious society healthily.This paper, based on previous literature, though Statistical Yearbook and the official website organizing the data, is the first time from comprehensive theoretical, empirical, and other angles to compare individual income tax and its effects to income distribution between China and the United States. In the empirical analysis section about the status of the personal income tax, First, it use of the proportion of GDP and the proportion of total individual income tax revenue, measuring dominant position of it, and reflecting our country's low proportion of individual income tax. Second, it use of gini coefficient to compare to indicate changes in income gap, income distribution estimates to measure individual income tax adjusting the effect of income distribution. This paper use quantitative analysis, it has some persuasive, using the latest information and data at home and abroad to fill gaps in the theoretical circle.After this study show that, neither the USA nor China, individual income tax on the income gap has a positive function of regulating. The United States adjust the intensity of personal income tax is about 10.84%.China is about 1.81%. Individual income tax regulation in China is very weak. The effect of weak due to various factors, such as, poorly designed individual income tax rates, unreasonable standard deduction. The article draws on the successful experience of the United States, we need to implement a combination of classification and comprehensive income tax system, optimize of rate structure, adjust the standard deductions, enhance the level of individual income tax collection, combined with the reality in China, put forward a proposal of individual income tax system.