The Income Distribution Effect Of Personal Income Tax

This article studies personal income tax from the perspective of itemized income sources to provide suggestions for improving the tax system.According to the source of income,income can be divided into wage,operating income,property income and transfer income.Based on personal income tax data from2011 to 2017,this paper estimates individual tax structure and itemized income tax burden.The results show that in the context of diverse sources of income,personal income taxes are still dominated by wages.Thus,the personal income tax structure is unreasonable.The classification system of personal income tax has exacerbated the distortion of the source structure of personal income tax.The MT index confirms that under the classified collection model the income distribution effect of personal income tax is limited.Therefore,it is necessary to accelerate the transition from the classified collection to a comprehensive and classified collection.Based on the itemized collection mode,the decomposition method of the Gini coefficient according to income composition is derived to analyze the distribution effect of the tax on itemized income.The empirical findings show that the distribution effect of individual income tax on operating income is more obvious.Decompose the average tax rate and progressiveness that affect MT indicators according to the source of income.The conclusion is that the low tax burden on wage causes a low average tax rate.The tax burden on property income and operating income is high.Operating income tax burden contributes the most to the average tax rate.Operating income and wage income are both highly progressive ? But the progressiveness of property income is low.The progressiveness of operating income contributes the most to the overall progressiveness.Therefore,the personal income tax mainly exerts the income distribution effect through operating income.The conclusion that the personal income tax mainly regulates operating income is inconsistent with reality.Investigating the reasons,it was found that the nominal tax burden on property income and operating income was much higher than the actual tax burden.This shows that the phenomenon of tax evasion of operating income and property income is serious.Therefore,the tax is too dependent on wage.The operating income and part of the property income are taxed by self-declaration.Asymmetric information,Inadequate tax collection and weak tax consciousness of residents are the reasons for the serious tax loss.The composition of property income is relatively complex.Further analysis found that housing rent is the main source of property income.To this end,this article puts forward suggestions to improve the personal income tax system.From the perspective of income structure,the government should create conditions for more people to have property income and operating income.From the perspective of the design of the personal income tax system,the operating income is included in the comprehensive income,and the syndrome income model is adopted.Property income follows the itemized collection mode.Rent adopts a progressive tax system.From the perspective of tax collection and management,on the one hand,we must establish a modern tax information system and improve the service level of tax personnel to improve the level of tax collection and management;on the other hand,it is necessary to increase tax penalties for tax evasion and increase residents' awareness of tax,so as to encourage residents to declare taxes in accordance with the law.It is reasonable to improve housing leasing record system to pilot the leasing market.