The Analysis Of British Personal Income Tax Development Process And Experience For Reference

Tax is a powerful tool for national macroeconomic regulation and control.Fair and reasonable tax should not only provide the government with an adequate source of revenue without damaging social development,but also stimulate individuals' enthusiasm for working.Personal income tax as a direct tax,which is more difficult to transfer,can fundamentally guarantee the fairness and rationality of taxpayer's tax burden.In addition,personal income tax can effectively adjust the tax revenue,narrow the gap between rich and poor,and stabilize the harmonious development of society.China's current classified income tax has played an important role in organizing fiscal revenue and regulating income distribution since its introduction.However,with the development of economy and society,the drawbacks of this kind of classified income tax are gradually exposed.With the rapid aging of the population and the changing of the family structure due to two-child policy,the personal income tax system had already shown its backwardness.In facing of the complicated background,it is unfair to raise the personal allowance merely and stick to the original personal income tax system.The result would be conducive to neither economic regulation nor social stability.Therefore,it is time to reform the personal income tax.As the birthplace of personal income tax,after more than two centuries of development,Britain has formed a more comprehensive,systematic and mature system.It would be helpful for China to use the British tax theory and policy practice for reference.Based on the analysis of the British personal income tax development and reform process,we believe that the personal income tax in the UK has experienced three stages of reforming,that is,the introduction of income tax,becoming the main taxes,and structural reforming.Meanwhile,the functions of personal income tax have also extended from raising revenue,to adjusting income distribution,and then to the realization of social justice.It can be found that the extension and transformation of the functions of personal income tax in Britain are also consistent with the original intention of personal tax reform in China.Therefore,in this paper,we try to analyze the British personal income tax.By going through with the British historical background,tax system changes,the characteristics of the times and other aspects,we find the relationship between income tax reform and social development.At the end of this paper,by concluding the experience of British income tax reform,we give some advice on tax reform in the tax rate designing,tax system setting,tax collection based on China's current background.