The Optimum Reform Study Of Personal Income Tax

After several reforms, China’s personal income tax system has realized the function toadjust the income gap and increase our revenues, however, the personal income tax systemstill has a lot of unreasonable problems, such as the tax base is too narrow, the topmarginal tax rate is too high, the level is too excessive, the expense deduction method isunreasonable, the standards of deduction are inconsistent, there are vulnerabilities incollection and management, the weak enforcement of withholding mode,all these makeour personal income tax against the principle of efficiency and fairness, so the personalincome tax is not give full play to adjust the income gap, increase the effectiveness offiscal revenue. Personal income tax is in a golden time for reform, the majority viewpointof personal income tax reform focus on whether the deduction should be increased and theamounts should be increased. However, I believe the core of personal income tax reform isnot to raise the deduction, the root of the problem is that personal income tax has long beenthe classified tax model, as well as the unreasonable factors in the income supervision ofthe collection and management, expense deduction, the marginal tax rate and the level. Insome foreign countries the personal income tax has been well formed after many years ofdevelopment, a more reasonable mode of collection and management has been formed,despite the current China’s unique national conditions, some of the common experienceshould be draw applications in China. This article will contrast other countries matureexperience, explore the personal income tax reform basis on the optimal tax systemtheoretical, put the principles of efficiency and fairness throughout the personal income taxreform, explore how to establish tax system suited to national conditions of China, to makemore financial funds and to adjust income distribution better.