Research On The Expense Deduction Of Individual Income Tax Under Classified System

In the 21st century, as our economy developing rapidly, the total GDP and tax revenues are increasing year-by-year. But the income discrepancy between residents is escalating. Gink coefficient announced by China's National Statistic Bureau in 2000 was 0.417 and it firstly exceeded 0.4 which is considered as international cordon. In 2005, Gink coefficient was 0.47 that was announced by World Bank and in 2007 was up to 0.49. The income discrepancy between rich and poor is becoming larger and larger, so that the contradiction and conflict in society are becoming more and more. In order to achieve the harmonious socialist society, build a all-round well-off society, resolve wealth discrepancy and promote social equity and justice, the government must take measures to adjust the income allocation. Tax policy is the basic measure and the individual income tax as an important adjustable tax plays a particular role in adjusting the income allocation. But now the individual income tax is not good enough at adjusting, especially the deductible expenses. The regulations of deductible expenses are oversimplified and the deduction items are disorder that hampered the individual income tax to adjust the income allocation. So considering the fair, it is available to research individual income tax deductible expenses in order to improve the individual income tax and reduce the income discrepancy.This article had four parts totally. The first part analysed the theory of individual income tax deductible expenses; The second part analysed the present situation of individual income tax deductible expenses and its problem; The third part was international compare which compared China's deductible expenses to US's and Japan's, and get the international experiences of improving individual income tax deductible expenses; The forth part set some policy suggestions to improve the individual income tax deductible expenses.This article hung the labour theory of value,the theory of social reproduction, the theory of population reproduction together with the individual income tax deductible expenses.This researched the deductible expenses from different corners, analyzed the necessity of individual income tax deductible expenses,and enriched the theoretical basis of individual income tax deductible expenses.When analyzed the international comparisons,I chose USA and Japan,because they respectively implemented synthesize income tax system and classify synthesize income tax system. Through analysing their individual income tax deductible expenses,I found something in common in order to get the experiences of other countries for the reform of individual income tax deductible expenses.The forth part was this article's emphases.It set a computational model. Firstly the article explained some conceptions,and then used statistics Exponential Smoothing and PTM function of Excel to analyse the relevant statistics in order to calculate the deduction,and lastly compared the deduction to the deduction of tax law,so that it could directly draw a conclusion of reform. Through analysing and calculating, it drew some conclusions:1,we must widen extension of deduction items, including family deduction, interest of housing loan, education fee, medical treatment fee and especial fee.2, we must regulate the individual income tax deductible expenses.3, we must set up a elasticity mechanism of individual income tax deductible expenses.4, we must consummate the complement measures.