Personal Income Tax Reform Research On Promoting Fair Distribution

During the 12th five-year plan period, outline clearly puts forward the reform should pay attention to the livelihood of the people. Of the several reform proposals in the benefit of people, tax reform is particularly important; therefore this article selects the personal income tax to do the research on its collection system and management. On the one hand, there are still a lot of disadvantages in the personal income tax system and the government department has not reached consensus on the reform; on the other hand, the individual income tax is not only closely related to every citizen, but the individual income tax has a great role in promoting fairness and narrowing the gap between rich and poor. In view of this, further improving personal income tax system is very urgent and necessary.This article is started from the basic theory and economic utility function of current personal income tax system, in the second chapter take Tianjin pay data as the research example, through analysis and comparison before and after tax Gini coefficient, use quantitative study of the empirical method to list current Tianjin individual income tax economic situation and then analyzes the main characteristics of the individual income tax. Then the article explains the basic problems of personal income tax system in our country from four aspects, including the classification system of taxation model weakening tax adjusting income equitable distribution of economic utility, individual class cannot consider tax burden principle, expense deduction system lack of fair and progressive tax classes. Then the third chapter analyzes the reform of personal income tax. This chapter discusses the international experience separately for each problem for reference which helps to better put forward reasonable proposals for reform from the perspective of macro and micro Angle. In the fourth chapter, it deeply describes the personal income tax collection and management system reform. This chapter first analyzes the two major drawbacks existing in the personal income tax collection and management system, namely the citizens’ weak tax consciousness with imperfect means of information and insufficient high income tax control with invisible income phenomenon. Then the author puts forward improvement ideas from the perspective of theoretical and practical aspect considering the two defects. The fifth chapter summaries the full text and come up with the suggestions to this article, eventually making the relevant government departments to reform individual income tax collection and management system to narrow the gap in income distribution.