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Decomposition Of Social Income Adjustment Effect Of China’S Personal Income Tax And Selection Among Different Uniform Income Tax Modes

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  • HU HUA

    (School of Economics, Nankai University, Lequn N Rd, Nankai Qu, Tianjin Shi, China)

Abstract

Based on 10342 Chinese family samples, by means of non-linear models, the effects of wage income tax (WIT), individual business income tax (IBIT) and other income tax (OIT) on the income gap in China are analyzed. It is found that China’s classified income tax is helpful to narrow the income gap. WIT plays a very important role in narrowing the income gap, with IBIT and OIT widening the income gap. Such income taxes, especially WIT, cause differences of the tax burden between taxpayers who have the same income amount. Uniform income tax is an indispensable measure to solve the problems. On the basis of the income tax systems of 13 countries, 16 different kinds of personal or household uniform income tax modes were built up. Namibia’s household uniform income tax mode is practical to China, because the income adjustment effect of such mode is stronger than that of China’s classified income tax, but the average tax rate of it is lower than that of China’s classified income tax.

Suggested Citation

  • Hu Hua, 2018. "Decomposition Of Social Income Adjustment Effect Of China’S Personal Income Tax And Selection Among Different Uniform Income Tax Modes," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(04), pages 917-941, September.
    • Handle: RePEc:wsi:serxxx:v:63:y:2018:i:04:n:s0217590817420036
    DOI: 10.1142/S0217590817420036
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    References listed on IDEAS

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    1. Guangrong Ma & Jianwei Xu & Shi Li, 2015. "The Income Redistribution Effect Of China'S Personal Income Tax: What The Micro-Data Say," Contemporary Economic Policy, Western Economic Association International, vol. 33(3), pages 488-498, July.
    2. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
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