Research On Income Distribution Effect Of Individual Income Tax

More than forty years of reform and opening up,China's economy has rapidly taken off and the living standards of its residents have improved.The report of the 19th National Congress pointed out that socialism with Chinese characteristics has entered a new era.The main contradiction in our society is the contradiction between the people's growing need for a better life and the development of inadequate balance."Poverty eradication and improvement of people's livelihood"is the development goal of our party to achieve a comprehensive well-off society.The disparity in income gap between Chinese residents and the deepening of social inequality are important issues facing China at this stage.Personal income tax is an important means for the government to macro-control the income level of residents.China's personal income tax has undergone seven major reforms,and the new tax bill was fully implemented on January 1,2019.What changes have occurred in the personal income tax system,how to narrow the income gap between residents and further improve the direction of individual taxes,these are the key points for the tax authorities and academic circles to explore.In order to explore the current situation of income distribution gap of Chinese residents and the adjustment effect of individual income tax,this paper conducts a detailed discussion on this issue by combining normative analysis and empirical analysis.First of all,based on the systematic elaboration of relevant theories of income distribution effect,this paper analyzed the change of per capita disposable income of urban and rural residents in China through data collection and chart collection,and found that the income gap of residents is wide and the effect of income distribution adjustment by individual tax is weak.After collecting the relevant statistical data of various provinces and cities,the changes of gini coefficient,MT index,average tax rate and progressive index in China in recent years were calculated and analyzed,and it was found that the overall gini coefficient in China was relatively high,and some years had the situation of reverse adjustment of resident income distribution.The progressive index of individual income tax in China is higher than the average level of developed countries,but the average tax rate is low.According to the decomposition of the MT index,the average tax rate and progressivity index are the important factors influencing the gini coefficient.Based on the above analysis,in the empirical analysis part,this paper divided the resident income into five equal parts,established the fixed effect regression model of 10 provinces,and analyzed the influence direction and degree of the gini coefficient on the average tax rate of different income classes.Comprehensive normative analysis and empirical analysis results show that the distribution of income in our country individual income tax has failed to effectively adjust,residents income distribution gap remains to be further solved.This article from the personal income tax system design,the overall structure of tax and tax collection and administration level three aspects analyze the cause of the individual income tax to adjust income distribution effect weak.At the same time,this article from the tax mode,expense deduction and tax rate structure three aspects analyze the new tax law to regulate the positive role of resident income distribution and the existing limitations.Finally,the Suggestions of perfecting personal income distribution effects:look from the personal income tax system design,shall establish a comprehensive assessment model,set up the automatic regulation mechanism of expense deduction,reduce the comprehensive income top marginal tax rate,reduce the tax rate levels.Look from the tax collection and administration,to strengthen the information management system of tax and tax legal system construction,improve the efficiency of the tax authority collection.