A Study On The Regulation Of Income Distribution From Individual Income Tax In China

In recent years,one of the hot topics of social concern is the fairness of income distribution.The national economy has developed rapidly,the quality of life and people's income level has also increased,at the same time,the income distribution gap between all sectors of society also began to expand with a growing trend.Individual income tax which regarded as one of the most effective taxes to reduce the income gap,has been paid more and more attention.However,individual income tax has not played a role in narrowing the income gap up to our expectations in China.Why did it not work well? What are the reasons? And how to reform and adjust the existing tax system to make the individual income tax play a stronger effect? This is the focus of scholars have been studying,also the problems this article tries to analyze and solve.This paper mainly focus on the income gap of urban residents in China,according to the actual situation of the current tax system,The current situation of income gap of urban residents is estimated,and the individual income tax burden is compared in different perspectives.In the empirical analysis,the first part calculates the changes in the income share of different income groups before and after the collection of individual income tax,in the second part,the pre and after tax Gini coefficient are calculated from 1995 to 2012.Then compare the regulatory role of individual income tax to the provinces of different development level.Finally,through the selection of East,middle and West nine different provinces panel data,analysis the relationship between the Gini coefficient after tax income and the low,middle,high income after tax income and the average tax rate of the three groups through regression analysis of Eviews8 and R measurement software.The main conclusions of this paper are as follows:First: Through the analysis of the income gap between residents in different aspects,the income gap between urban residents in China is showing a trend of constant expansion between regions,industries and sectors.Second: Through the comparison of the tax burden analysis,we can see the fact that the tax burden between different regions reflects the fairness,the economically developed eastern provinces,the tax burden is higher than that in other areas,but the fact that the western tax burden is higher than the central area is unreasonable phenomenon,showing that tax reform should pay attention to the differences between regions to improve the fairness of tax.To the residents of different income,the payroll tax burden is rising year by year,the operating income and property tax burden have declined year by year,the tax reform should Increase the intensity of income tax collection of these two kinds income.Third: The individual income tax has different regulation seven groups of different income levels.the high income group has the largest decline after tax,but for the low income group does not play a good regulatory role,which indicates that only the improvement of tax exemption does not work much.Fourth: China's individual income tax has been to narrowing the income gap between urban residents,and the regulation is showing a gradually strengthening trend,but the overall effect is still little,showing that China's tax regulation needs to be strengthened.Fifth: Individual income tax in the economically developed provinces work better than the developing provinces.The 2011 tax reform has reduced the income gap in Beijing city largely,but in Zhejiang Province,Anhui Province,Henan Province,the adjustment is greatly reduced,indicating that China's tax system does not take into account the regional differences,failing to work well.Sixth: Econometric model analysis shows that the increasing in the low income group after tax income,can reduce urban residents disposable income Gini coefficient;reducing the average rate of middle and low income groups,improving the average rate of the high income group can also reduce the urban residents disposable income Gini coefficient,and high income elasticity coefficient set the maximum absolute value,so the increase of the high income group can adjust the existing income inequality well,but at present,the main body of individual income tax in our country is the working class,this is one reason why China's individual income tax has not been able to play the role as we expected.