A Study On The Regulation Of Income Distribution From Personal Income Tax In China

In recent years, with the rapid development of China’s economy and the improvement of people’s lives, the income gap become wide, and the trend continues to accelerate. It becomes the major danger that effects the harmony of the society and the sustainable development of the economy. In the voice of the reform of income distribution, the personal income tax reformation stands at the cusp is given great expectation. Now some people have a strong sense of injustice in the face of income distribution, and they even propose the statement of "poor people in rich country". The personal income tax, as a powerful means of the government to adjust the income distribution, should play its function in the current economic situation. In order to reduce the gap of the income distribution, how to regulate the personal income tax is becoming the major issues of the financial theory community and the tax department. And this paper is focused on solving the problem.The paper is closely around the topic of "Regulation of income distribution from personal income tax in China ".It is based on the reality of the economy and tax system, and through the theoretical analysis on the regulation of China’s personal income tax on the income distribution, and combines with the fact that income gap is expanding, and defines the function of personal income tax. Then the paper gives an empirical analysis on the effect of the regulation of China’s personal income tax on the income distribution, and examines the function of the re-distribution. On the basis of a combination of theory and practice, the paper gives the explanation that the regulation of China’s personal income tax is not ineffective, and proposes the suggestion on how to improve the personal income tax system for reducing the gap of the income.The main conclusions of the article is:First:For resident at different income level, the personal income tax embodies the principle of good amount of burden that the high-income group has a heavier tax burden than the low-income group; The adjustment of the threshold also plays a certain role, but the effect is weakened, and we can not simply solve the problem by raising the threshold in the reform of the personal income tax.Second:For resident that have different income source, the personal income tax of the workers is gradually increased, on the contrary, the personal income tax of business and property income is reduced. Therefore, the reform of personal income tax should focus on the business and property income. Third:For resident of different regions, the personal income tax has played a certain role in the tax burden of the fair area, but the irrational phenomenon that the tax burden is higher in the western region than in the central region is still existing. Different regions should also take different tax policies in the reform of personal income tax, so the personal income tax can play the role of the fair taxation.Four:Through calculating the Gini coefficient of all income and disposable income that eliminates the personal income tax by PE index, the paper measures the degree of the personal income tax in regulating the income. The results show that the action of the regulation is gradually increased, but the intensity is weak.Five:The paper analyzes the income gap between urban and rural by Taylor index, and the results show the contribution that the income gap between urban and rural makes to the total gap is declining, but the contribution rate of the income gap of urban residents is increasing. With the increasing of urban population, the scope of the personal income tax will be further expanded, it provides condition for regulating the income distribution.