The discussion on China's personal income tax in regulating income distribution

[Abstract] personal income tax and our personal lives, the income gap with the role of regulation, while the current situation from our point of view, the regulatory role of personal income tax is exceedingly weak. This article aims to analyze the role of personal income tax adjustment causes little .

[Keyword] personal income tax adjustment

In China, the financial revenue mainly by taxes, fees, interest, four plates constitute a debt, and taxes due to its mandatory, free, fixed characteristics, accounted for the vast majority of revenue share. Statistically data show that China's tax revenue proportion of total revenue was more than 95% can be seen, the tax for our country and the world is very important.

Personal income tax as an integral part of recent years was as high as 7%, although the proportion is not high, but because of the huge number of China's tax revenue, thus the absolute number of individual income tax is substantial in some countries, personal income tax is main taxes, in a larger proportion of revenue, have a greater impact on the economy. The so-called personal income tax, that is, personal income tax, is a natural person of the categories of taxable income taxed, and levied a tax, the government used to adjust the personal income tax on a means of personal income tax as the column includes not only individuals but also with the natural nature of the business.

In China, the role of personal income tax are the following:

An adjustment of income distribution, social equity,

2 to enhance tax awareness, establish the concept of obligation,

3 expansion of enrichment channels and increase revenue.
Since the introduction of personal income tax since its gap in the regulation of income distribution has played a huge role. Embodies social equity, increased revenue, do both, but, as the country's rapid economic growth and rising incomes, $ 800 threshold has been less and less suited to the needs of economic and social development, in regulating income distribution gap has been no more significant results. but there have been various drawbacks, and was the most obvious of which is robbing the poor to the rich, due to the general wage levels of personal income tax is withheld by the unit, and those who have high income and other ways broken down by income underreporting of omitted income. Thus, the state will tax threshold from 800 yuan to 1,500 yuan, but also through the establishment of personal income file system full amount proposed management concepts and seed collection and management of high-income people as a way to focus on other, trying to better play the role of a tax, but the hot water in China is still faced with such a phenomenon, namely the adjustment of income distribution of basic work, it is an indisputable fact that in recent years, the Chinese income distribution gap has reached the international warning line of coverage are common. So, what led to the personal income tax in regulating income distribution, basic does not work it? study The main reasons are the following:

First, the threshold is too low

China has experienced 30 years of reform and opening up, people's living standards have greatly improved, 1,500 yuan for the general public, is already a very easy number to achieve the same time, the number has not very good to meet people's living expenses in the normal expenses can not protect their own premise, but also to the state to pay a tax on people's physiological and psychological is a big blow.

Second, lack of supervision

This lack of supervision, mainly for the rich, previously mentioned, the general working-class personal income tax is withheld by the unit, and those who have high income and other ways broken down by income underreporting of omitted income, so , even if a high income people who need to pay almost equivalent to 1500 yuan income earners a tax. Consequences is the 'rich get richer, the poor hard rich.'

Third, the rate design is unreasonable

The current threshold of 1,500 yuan / month, the standard deduction of 1,500 yuan / month, no more than 500 yuan, the rate of 5%, more than 500-2000 yuan, the tax rate of 10% over 2000-5000 yuan, the tax rate 15%, more than 5000-20000 yuan part. Rate of 20%, more than 20,000 to 40,000 yuan, the tax rate of 25%, more than 40,000 to 60,000 yuan, the tax rate 30%, more than 60,000 to 80,000 yuan, the tax rate 35%, quick deduction of 6375 more than 80,000 yuan to 100,000 yuan, the tax rate 40%, more than 100,000 yuan, the tax rate 45% of this rate for high income earners, despite the large amount of revenue to reduce the absolute, but relative to low-income people, the The tax can be paid a pre-tax income than others, and its consequences as the result of the second point, that 'the rich get richer, the poor hard rich.'

Fourth, the pursuit of fairness and tax costs there is a contradiction

The premise is fairly complex tax system, tax system more complex, more able to achieve a fair, so if one-sided pursuit of fairness, we need to develop their complex tax system, which requires a very high tax costs, but also for state and government - not a small burden.

From this perspective, a tax reform is imperative. So, how can a tax system for effective reform? Authors believe that you can adjust the income distribution effect is not obvious from the start on a number of reasons: Links to free download Center

1 to raise the threshold. Because I do not personally a tax-depth study, Xin to the threshold can not be made more reasonable, but 1500 yuan / month threshold is manifestly unreasonable. At the present working-class income evaluation, 1500 Yuan / month income is covering almost all the children of working-class, which is no doubt, so I personally think that should be in accordance with local income levels, the average income of working-class as the threshold.

2 strengthen the regulation can be set up specialized agencies to monitor the income of the rich, the rich as much as possible to avoid dismemberment of their income in order to achieve the purpose of paying less tax.

3 tax reform and I think a more feasible approach is to reduce the income of a person with relatively low tax rate, increase high-income earners a tax rate, without prejudice to the 'hard work' principle, under the premise, as far as possible narrow the income gap, so that one can narrow the income gap, and second, it will not adversely affect the production of high-income initiative.

4 to develop a reasonable system of taxation in the pursuit of fairness and tax costs to find a balance between, on the premise of controlling the cost of taxation to be fair as much as possible.

5 step up publicity and education efforts as much as possible to avoid tax evasion behavior that undermine the fair, increasing the penalties for tax evasion efforts, the greater the amount of tax evasion, and the corresponding punishment more severe.

China's personal income tax in regulating income distribution to the basic work of this larger social context, we should try to learn the tax knowledge and absorb some of the foreign tax system suited to China's national conditions and actively reform the tax system, tax system to a fully play its regulatory role, so the true sense of fairness.


[1] Guo-Qing Wang Zhuming Xi Liu Rongguo home tax Southwestern University of Finance Press Links to free download

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