Analysis Of Current Situation And Reform Of Zhongshan Personal Income Tax

People’s income increased generally as the Reform and Open policy applied;meanwhile, the gap of the income among the people were also enlarged. Personalincome tax is an important tool to adjust the excessive income gap, for the purpose ofthe harmonious social environment. Since the tax reform started in1994, personalincome tax increased rapidly and became a major source of the tax income ofgovernment. People gradually noticed the effect of the personal income tax on therevenue and the adjustment of the income distribution. However, the drawback ofcurrent tax policy is also revealed, as the greater and greater scope of levy and theamount of levy of personal income tax. It is shown as the minimum deduct standard andtax progressive level, over high marginal tax rate, irrational tax rate, and all of theseresult in that the personal income tax’s adjustment function on the income distributiondid not effect completely and cause the problem of tax evasion. Those problems anddrawbacks cause extreme attention on the socially and academically. Government alsoemphasizes the value of the tax policy reform and the reconstruction of the personalincome tax system scientifically, to guide the right direction of the development ofpersonal income tax. In this background, the structural reform of personal income tax isincreasingly important to reduce the gap of wealth.The article proposes some suggestions on improving the personal income taxsystem and policy, by starting with the current personal income tax policy, with thereality of Zhongshan, supported by the levying data of Zhongshan’s personal income tax,based on the analysis the drawbacks of current personal income tax system and levypolicy, comparing with such system and policy of developed countries such as UnitedStates and Japan. On the system, changing the current tax system from classified type tocomprehensive type; rationally positioning the taxable income, readjusting tax rate,reducing the tax rate grade; broadening tax base, improving the fee deduction system,strengthening the tax fund source management, implementing the withhold and remittax declaration, applying self-declaration model; enhancing the training of tax agency, standardizing the industry of tax agency, promoting the awareness of tax law to taxpayer,Tax authority should enhance the personal tax law implementation, enforce the severepunishment to tax evasion behaviors, and push the development of efficient informationnetwork. By the means above, personal income tax will be expected to act the effort ofadjustment of income distribution, reduction the gap of wealth and facilitating the socialequity.