A Study On The Impact Of Personal Income Tax Deduction On Income Gap Of Urban Residents

Since 2006,China has adjusted the cost deduction standard for wages and salaries for three times,although the three policy changes have promoted the function of taxation to a certain extent,but did not give full play to the regulation of income distribution.In addition,the gap between rich and poor situation in China is becoming increasingly serious,a tax as an important means of regulating the distribution of income,urgent treatment for further reform and improvement.In recent years,the implementation of the comprehensive personal income tax system reform calls,the CPC Central Committee has repeatedly stressed the need to gradually establish a sound integrated and classified personal income tax system as the future of China's tax reform goals.The deduction system as the most important part of the personal income tax system,its planning and design in the personal income tax reform process has been concerned about.And China's personal income tax deduction system is too single,the lack of a real reflection of the actual burden of our residents cost deduction system.Here the article will explore the reform of the tax deduction system under the combination of synthesis and classification as a tax unit of a family.The article first uses the comprehensive labor income as the tax base,introduces the special cost deduction items including the individual basic livelihood expenses deduction,the child support deduction,the old support deduction and the interest deduction of the housing loan,the use of the Chinese family to track the 2014 national sample survey data,the effect of personal income tax policy simulation analysis.The results show that the special deduction mechanism can better reflect the individual and family burden of taxpayers,and better reflect the principle of tax burden.The article uses those indexes(Gini coefficient,Atkinson index and generalized entropy index)to evaluate the simulation effect of the new policy.The results show that the deduction is more conducive to the adjustment of the income distribution of personal income tax,but also helps to reduce the gap of the income distribution between area and area.Based on the above research results,the article suggested that China should speed up the reform of the comprehensive tax collection model,timely introduction of special cost deduction criteria,and pay attention to strengthening the tax on high income groups and high income areas of income inequality adjustment.While constantly improving the family of micro-data,for further tax reform to prepare.