Studies On Mixed Individual Income Tax Base Determine Of China

This paper mainly concentrates on the issues to construct the base of mixed Individual Income Tax(ⅡT). Main approach is to compare the base construction of different countries to provide theoretical and practical basis in Chinese ⅡT reform.At the beginning of this paper, the author introduces the background of Chinese ⅡT reform. The comprehensive ⅡT system was firstly mentioned in the "Nine Five-Year Plan", and then mentioned in the later Five-Year Plans until the "Twelve Five-Year Plan". But now, the government prefer mixed ⅡT system than comprehensive ⅡT system. Although it has been mentioned many times in the past years, it’s difficult to be put into effect. So many scholars studies the reasons and come out a solution:the best way towards comprehensive ⅡT is mixed ⅡT system. And on the way to mixed ⅡT system, tax base is of importance. So this paper focus how to determine tax base.There are many theories about tax base, such as source theory, net added asset value theory, consumer spending theory, comprehensive tax base and non-comprehensive tax base. According to these theories, both domestic and foreign scholars have conducted a lot of studies.There are many problems in current Chinese ⅡT tax base, whose basic cause is the classified ⅡT system. But because of the special conditions in China, the reform is not an easy task. Thus, we have to learn from other countries to conduct progressive reform.The United States is a country whose ⅡT system is similar to comprehensive system. All the income is gathered to be taxed. But in the US, capital gains are charged in low tax rate which is the characteristic of mixed ⅡT system. The US has extensive tax source and perfect tax exemptions and deductions.The UK is biased classification system of income tax. According to the source, income is divided into two categories:Labor gains and Capital gains. They have difference tax deductions and different tax rate. The ⅡT of the UK is limited by the regulations, which means that income not included in the regulations will not be taxed, so that the base becomes narrower than the US. But the tax exemptions and deductions in the UK are also very comprehensive, reflecting the different policies on all kinds of taxpayers.After the analysis of two types of mixed IIT system of the US and the UK, the paper discusses the tax base and tax reform of China, and presents some reform scheme for mixed tax base. Then the author offered a few advices for reform, including long-run advices and short-run advices, as the longing and prospect for Chinese PIT base reform.