Optimal Design Of Individual Income Tax Rate Structure

The personal income tax refers to the country legally levy taxes from individuals whose income exceeds a certain amount. It's an important government instrument for redistributing individual income. As the stable and healthy development of the socialist market economy, Personal income tax is an important tax in the Chinese taxation system. Its proportion in national fiscal revenue is more and more important, and the role of income adjustment and socio-economic regulation has become increasingly evident. But in the real economic development, the existing policies, laws and regulations for personal income tax have been inconsistent with the national macro control policy. Some further revision and improvement about personal income tax must be taken. Otherwise, it makes not only national tax payment run off, but also taxation unfair, which would heavy damage the innovation of our country tax and public finance system. Based on these problems, some corresponding reformation on the country's personal income tax law is both inevitable and necessary. Therefore we must have a complete system of personal income tax reform measures. It is significant to for the healthy development of socialist market economy.The reformation of individual income tax includes taxation model, deduct item, tax rate structure, pay tax declaration, tax administration and levy, et al. In the present paper, the reformation of tax rate structure is mainly discussed, including choice of Tax Rate, the level of tax rates, determination of the tax rate of progression and investigation of model of rate structure. Forms and the individual income tax rate structure is made optimal design. First, the basic theory, especially the basic connotations and character about individual income tax is discussed. Second, under the direction of basic theory, the basic personal income tax rate forms are analyzed and compared with other country's tax rate forms. The deference between the Chinese tax rate and that of the western countries is detailedly discussed. Third, in view of the problems of existing tax rate structure, an optimal he design of tax rate structure is put forward.