Study On The Redistribution Effect Of Individual Income Tax In China

This paper studies the redistribution effect of individual income tax from the perspective of different levels of per capita income and different sources of disposable income,and provides suggestions for improving the individual income tax system.The article classifies income by source,based on disposable income stability per capita,into wage income,operating income,property income and transfer income.Based on the household income data from 2016 to 2020,the progressivity,average tax rate and redistribution effect of individual income tax are calculated.It is found that wage income is still the key factor of income inequality in the context of increasing diversification of income sources.In areas where per capita income is high,income inequality is more pronounced due to disposable income income and property income.The contribution of property income to widening the income gap is also grossly underestimated.The irrational structure of individual income tax and the large-classified collection pattern have aggravated the distortion of income structure caused by redistribution.MT Index confirms that the effect of income distribution of individual income tax is limited under the pattern of large classification.Therefore,it is necessary to accelerate the transformation of the collection mode to the combination of large-scale integration and small-scale classification.Based on the model of individual income tax subentry Levy and the decomposition method of Keeny coefficient according to income composition,this paper analyzes the adjustment of individual income tax to subentry income,the empirical results show that the adjustment of personal income tax on wage income and property income is insufficient.The average tax rate and progressivity affecting MT indicators are decomposed according to the source of income.The conclusion is that the main sources of income which lead to the low average tax rate of individual income tax are different under different economic development conditions.The biggest contribution to the average tax rate and progressivity of individual income tax is wage income.The lower the disposable income,the more dependent the residents are on wage income,so the higher the average tax rate and progressivity.Different provinces have different proportion of operating income and sub-concentration rate,which leads to the difference in the contribution of operating income to the average tax rate.The property income tax burden is higher but the proportion is lowest,therefore the comprehensive contribution rate to the average tax rate is lowest.At the same time,the property income also weakened the progressiveness of the total income in different degrees.The high proportion tax rate makes the contradiction between the property income and the redistribution more fair.This paper compares the Individual Income Tax in Britain,America,Japan and other countries,and sums up the international experience of the adjustment function of individual income tax.Countries have implemented a comprehensive tax model,with a variety of index-based project deduction system.The introduction of reward and punishment mechanism in the process of individual income tax declaration has greatly improved the tax compliance of taxpayers.The establishment of a comprehensive variety of anti-tax avoidance measures to strengthen the authority of the tax law.Therefore,this paper puts forward some suggestions to improve the individual income tax system.Gradually expand the scope of comprehensive income,avoid tax distortion,and reduce tax evasion caused by different tax rates.Set differential cost deduction,reflect the principle of regressive degradation,indexation,regional differentiation.We will reduce the top marginal tax rate on comprehensive income and strengthen the tax collection and management of high-income groups.Realize the support of negative income tax and strengthen the care for special groups.In addition,we should gradually improve the anti-tax avoidance laws and regulations,strengthen tax supervision and build a third-party information sharing system.