Research On The Inheritance Tax System For The Inter-Generational Transfer Of Household Wealth In China

This study devises the inheritance tax system which is suitable for the current family situation of Chinese residents on the basis of the inter-generational wealth transfer theory and the inheritance tax theory,and surveys the family welfare effect changes before and after imposing the inheritance tax.The main contents of this study are as follows:(1)Elaborate the inter-generational transfer theory of wealth and the inheritance tax theory on the basis of document analysis.(2)Devise Chinese inheritance tax system.Applying the Modigliani life-cycle theory to calculate the accumulated heritage tax base during the inter-generational transfer period of sample filial generation family;Utilizing the extended basic inter-generational transmission model to measure the income elasticity of the sample family from total family samples and the different income family two different perspectives;Designing five marginal tax rates and simulating Chinese inheritance progressivity tax system.(3)Measure welfare effect of levying the inheritance tax in China.According to the survey data from the sample family and Chinese inheritance tax base and tax rates,measure the welfare effect variation before and after imposing the legacy tax of the sample family from efficiency and justice two dimensions.(4)Based on document analysis and the inheritance tax theory,put forward research results on the basis of measuring welfare effect and policy recommendations.The empirical results:(1)inter-generational income elasticity rank of different income family: the filial generation's dependency on inter-generational transferred wealth of sire generation is 0.3713 for family which has high income filial generation and low income sire generation,which ranks first;the filial generation's dependency on inter-generational transferred wealth of sire generation is 0.1250 for family which has high income filial generation and high income sire generation,which is the smallest.(2)Levying heritage tax increases labor supply of sample filial generation family,and reduces inter-generational transfer amount of wealth from sample filial generation family to the next generation.Gini Coefficient of sample filial generation family decreases from 0.3046(pre-tax)to 0.2993(after-tax),and the income distribution is improved.The enlightening results:(1)Although the marketing process of China is accelerating,the willingness for transferring the family wealth across generations of Chinese households remains strong,that is to say,this kind of traditional culture power contained in this phenomenon is stronger than the power of the market.(2)From the perspective of behavioral economics,the transfer of wealth across generation is actually a kind of behavior which is altruistic in the surface but actually self-interested.(3)The inheritance tax is essentially to adjust the fair result of sire generation and the fair chance of next generation,and in a generational sense,it is a sort of good tax which really maintains the market as well as the social justice.(4)The core of the inheritance tax system design depends on the choice of taxpayer,the definition of tax base and the progressive level of tax rate.The policy recommendations of this study:(1)China should levy the inheritance tax as soon as possible based on fair target of multidimensional extension.The inheritance tax is the tax that can give consideration to opportunity fair,progress fair and result fair simultaneously,and it's an important tool for the government to promote the marketization process.(2)The inheritance tax system in China should follow the equity,efficiency and freedom of welfare economics these objectives to be designed.According to Capability theory of Sen(1999),the inheritance tax can achieve the dual balance between fairness and efficiency on the basis of extending freedom.(3)The China's inheritance tax system design should target on forming a long-term and stable "olive-shaped" income distribution structure.Heritage scale,heritage transfer mode and heritage recipients' income level of different income levels should be important reference variables of the inheritance tax system design.The inheritance tax system design should depend on above reference variables,and the choice of tax base and tax rates is the determinants of the inheritance tax system's quality,and it plays a vital role in forming an "olive-shaped" income distribution structure.(4)The Chinese inheritance tax system design should fully considerate the China's economic and social characteristics as well as the tolerance of household to wealth differences on the basis of drawing lessons from international experience.The Chinese inheritance tax system should follow international standards in the choice of tax base,tax progressivity design,the marginal tax rate comparison and selection of taxpayers,and consider China's social preferences and expectations of households to the future at the same time.(5)The China's inheritance tax system should be designed to integrate with the individual income tax.The cumulative flow of personal income tax paid by a person's life directly affects the size of the stock of the tax base.Therefore,the inheritance tax base has to consider the choice of the tax base of individual income tax,the marginal tax rate of inheritance tax has to consider the marginal tax rate of individual income tax.