An Empirical Analysis On The Role Of Individual Income Tax On The Gap Of Income Distribution In China

This paper aims to analyze the strength of the role of individual income tax on the income distributiongap in China and the improved method, and according to the results put forward the reform proposals of thepersonal income tax.This paper firstly describes the theoretical basis of personal income tax to adjust income distribution gap,on this basis, the calculation and comparative analysis of China’s total income of urban residents disposableincome Gini coefficient, Gini coefficient and tax income Gini coefficient of the three Gini coefficient anddifferent income groups the average tax rate of personal income tax, regulatory effect on China thedisparity of income distribution. Then, an econometric analysis model, the disposable income of all incomelevels of the Gini coefficient and the relationship of disposable income, the average tax rate of personalincome tax, and optimizing the use of this model by stepwise regression method.Conclusion:First, from1997to2001, the personal income tax to the reverse effect on the regulation of Chinese urbanresidents income distribution gap, but the reverse regulation weakening; from2002to2008, the personalincome tax to a positive role on the regulation of Chinese urban residents income distribution gap, butpositive moderating effect is not obvious; from2009to2012, the personal income tax to the reverse effecton the regulation of Chinese urban residents income distribution gap up.Second, low income households, the highest income households in the two income levels of disposableincome Gini coefficient effect than other income groups big. Personal income tax reform, should be paidmore attention to and relatively low income households and high income related reforms.Third, China’s personal income tax is progressive tax rate design some unreasonable, to a certain extent,not only can not reduce the income gap, but in reverse regulation effect on income distribution gap.This shows, personal income tax has not become an important tool for our country to adjust the incomedistribution gap, but not the theory of regulating income distribution gap so large. Our country shouldaccelerate the reform of personal income tax. To improve the low income households disposable income,reduce the highest income households disposable income, reduce the highest, lower income households income ratio, reduce the average tax rates are relatively low income households to reduce the Ginicoefficient, narrowing the gap of income distribution. And puts forward the personal income tax policyshould be combined with other income distribution policy, so to narrow the income gap, establishing astable and harmonious socialist society to play a greater role.