Optimization Of Special Additional Deduction Standard Of Personal Income Tax In China

1980 is the year when China’s individual income tax was levied.Over the past 40 years,the tax revenue of personal income tax has increased year by year,reaching 1156.826 billion yuan by 2020,reflecting the increasing audience of personal income tax and the increasing ability to raise fiscal revenue.But at the same time of rapid development,it ignores the realization of fairness.In recent years,China’s Gini coefficient has been in the range of 0.46-0.49,the income gap between high-income and low-income people is increasing,indicating that the problem of income gap among regions,industries and cities in China is still serious.As one of the important means of "redistribution",personal income tax should be reformed continuously.2018 is an innovative year in the history of personal income tax reform.Based on the principles of fairness,reasonableness,people’s livelihood and simplicity,6 special additional deductions have been added,another special additional deduction was added in 2022.Each of the 7 special additional deductions is closely related to residents’ lives and has played an important role in reducing residents’ living costs and reducing tax burden,but there are still doubts about whether it will help to realize the fairness of individual income tax.Based on the relevant data,combined with the theory,this paper analyzes the problems existing in the 7 special additional deduction standards,and refers to the excellent experience in the personal income tax system of other countries in the world,and puts forward some suggestions to promote the realization of the redistribution function of personal income tax.This paper includes five parts.The name of first part is introduction,which takes the per capita disposable income and the income of personal income tax in recent years as the starting point to explain the research background,research status in china and other countries,etc;The title of second part is the notion definition and rationale.Through the computing system of individual income tax,it introduces the concept and basic matter of special additional deduction,and introduces the rationale of this paper;The third part is the present situation and problems of the special additional deduction standard.In this part,the six special additional deductions are divided into four categories: housing,education,medical treatment and pension.After a brief introduction to their basic situation,the existing problems are explained by using data and theory,including the fact that children’s education is not divided into education stages The special additional deduction for housing does not consider family factors,the starting point of serious illness medical deduction is high,the individual difference and inflation are not considered in supporting the elderly;The fourth part is the reference of international experience,which introduces the excellent international personal income tax practices;The last part is the advice to improve the special additional deduction standard.The part give some targeted advice based on the problems existing in the special additional deduction standard at the present stage and the reference of international experience.