Analysis On The Effect Of Personal Income Tax Reform In 2018

In the context of China's personal income tax reform in 2018,this paper,based on the relevant domestic and foreign literature research,combs the theoretical basis of personal income tax under the perspective of efficiency and fairness,and establishes the counterfactual hypothesis based on whether or not the personal income tax reform occurs,and further analyzes the policy effect brought by the reform through the microcosmic database of Chinese household financial survey data in 2017.According to the analysis,in the aspect of efficiency effect,the reform of personal income tax in 2018 has greatly reduced the average tax rate,brought good tax reduction effect,and contributed to reducing economic efficiency losses,especially the policy effect of focusing on the semi-comprehensive tax model and broadening the tax rate margins is significant,but the change of exemption and the special additional deduction policy have little effect on the average tax rate.In the aspect of fair effect,the overall progressive strengthening of personal income tax,especially the substantial increase in the comprehensive tax system progressively offsets the negative effect of the exemption,and the overall improvement in the horizontal equity of the course,its improvement is higher than the deterioration of vertical equity,and the reform finally strengthens the function of the tax redistribution.Overall,the 2018 personal income tax reform has a clear efficiency trends,which will greatly reduce the tax burden of taxpayers,especially on middle and low income families.In the future,we should further improve and perfect the personal income tax system to realize its income distribution function,especially in the aspect of vertical equity,we should embody the principle of energy negative tax,and the tax burden of different income people should be obviously different.