Research On The Retrogressive Effect Of Personal Tax Deferred Commercial Endowment Insurance

With the aggravation of aged population, the pension security becomes the problem of development in China. In order to get rid of the pension problem and meet the needs of members of society in pension, personal tax deferred commercial endowment insurance(hereinafter using abbreviation PTDCEI) is being actively discussed and tried in China. China hope to encourage people purchase the commercial endowment insurance by tax preference policy, for improving its pension security level and decreasing the dependence on basic social insurance. However, theoretically, tax deferred policy has the income reverse adjustment retrogressive effect which will widen the gap between the rich and the poor and is not conducive to social stability and harmony.Firstly, the thesis offers a literature review on PTDCEI home and abroad, meanwhile expounds the conception and connotation of PTDCEI and the necessity and feasibility of this policy’s implementation. Secondly, it concludes PTDCEI’s effect on the early stage of pilot application and introduces and draws on the experience of some typical countries that achieved clear results by tax deferred pension policy. Once again, it tests and analyzes the retrogressive effect bringing about by different type of tax deferred preference policy in different groups, using the solution of control variable with the angle of income and age pointcut. The sample, a product of pension insurance which is similar to the one discussed in Shanghai, is selected from China’s insurance market. Finally, according to the results this paper, it presents some policy recommendation for PTDCEI. This study shows that tax preference policy PTDCEI can produce retrogressive effect, and the level of it has positive correlation with the degree of tax preference. But today in China, under the circumstance of economic inequality and low per capita income, high earners become the breakthrough to promote the individual saving endowment insurance. So, as long as it is controlled in the range of affordable, the society should stand for the exist of PTDCEI.This paper checks the retrogressive effect of PTDCEI from the angle of income and age on the based on the typical pension insurance and some tax deferred preference policies, tests and amends previous theories. Meanwhile, some policy recommendation for PTDCEI’s retrogressive effect are proposed, hoping to explore good ideas on the policy formulation and implementation of PTDCEI. Consequently, it contributes to the improvement of China’s three-pillar pension system.