The Reform Of The Personal Income Tax

During the tax reform in 1994, the personal income tax revenue of our country is less than 1% of the total tax revenue.. However in recent years, with the continuous development of market economy and in-depth, per capita GDP also has the significantly improved, an increase of personal income tax tax revenue is larger, the in the whole tax system has already become the most potential tax. The deepening of the market reform, in bringing a huge social wealth, but also makes the source of China’s residents’ income continues to diversify, the polarization between rich and poor. The current personal income tax system has not adapted to the social development level, perfect individual income tax system reform, strengthen the function of promoting fair has become the key to deepen the overall tax reform.Personal income tax theory, there are three main modes: classification system, comprehensive assessment system and comprehensive classification system. Using our current individual income tax is levied model, the income of the taxpayer, according to different sources, divided for the same project, and in order to levy personal income tax. Comprehensive levied mode regardless of the taxpayer’s income sources where, regardless of income is what form, the taxpayer’s total income summary calculation of tax. The classification system is the combination of the above two models, the collection of the income classification, and the comprehensive expropriation. From the angle of fair taxation, comprehensive classification system integrated system in regulating the income gap, promote social fairness and justice is a better effect, but based on its complex design, on the level of tax collection and administration also has a higher demand.Than other two kinds of tax levy pattern, our current individual income tax is levied mode still has obvious deficiencies and problems. First is unfair taxation mode of classification, the items of income classification of unreasonable and comprehensive the industrious income taxpayers to a heavier burden on, have a wide range of sources in the high-income class but may pay less tax. Secondly, because of China’s personal income tax to take personal declaration system, the expense deduction does not take into account the different family burden taxpayers, to the neglect of the regulation of total household income, after tax household, the gap between rich and poor may greater. Also due to the economic and social development, the source of personal income more extensive, more diverse forms, the current personal income tax system has been unable to ensure the tax base of integrity, the taxpayer has a larger space for tax avoidance. Pattern classification levied a tax does not directly reflect the taxpayer’s tax burden ability and the ability to spend, and therefore can not be automatic stabilizer of economy. At the same time, because of its lagging tax collection and administration, it is not conducive to the cultivation and improvement of taxpayer’s tax consciousness..The study of the practice of personal income tax can also guide the direction of our country’s tax reform.. The American personal income tax system is currently internationally advanced and typical. As a comprehensive tax system, the tax system of the family is a great reference for the reform of our country’s tax.. And South Korea and China’s economy, culture has a lot of similar places, their personal income tax system is also worth studying.Key to the reform of China’s personal income tax is levied mode change, based on China’s national conditions, the comprehensive classification system is the optimal choice. On this basis, the family as a tax return unit will be more conducive to the promotion of a fair play a fair role. At the same time, according to the principle of optimal tax system, to optimize the structure of progressive tax rate. The expense deduction system and the tax credit system consummation, in addition to can increase to the fair adjustment strength, also will be advantageous to the personal income tax to realize the specific policy goal. Finally, in the tax reform at the same time, set up the advanced tax collection and management system will also be most important in the process of tax reform.