From Structural Imbalance to Structural Optimization:A Theoretical Analysis for Establishing a Modern Tax System

The essence of the modern tax system is the unity of the modern tax framework and the functions it supports.Behind the appearance of an unbalanced tax structure lies the reality of the shortcomings and weaknesses of the functions of modern taxation.The heart or soul of the establishment of a modern tax system is making modern tax functions the standard,acting to optimize the tax structure,and creating a form of tax system with a functional balance that integrates"optimized resource allocation,maintenance of market unity,promotion of social equity,and ensuring long-term national stability"constituting a modern tax framework.The transition from structural imbalance to structural optimization is the fundamental route to establishing a modern tax system.On the premise of maintaining basic stability in the macro-tax burden,the supplementation and strengthening of the shortcomings and weaknesses in modern tax functions primarily involve supplementing and strengthening the direct taxation shortcomings and weaknesses that are in an"absent"or"weak"state in the current tax framework.Increasing direct taxes and raising their proportion essentially mean increasing the tax paid by individuals and raising the share of individual tax revenue in total tax revenue.This is the most important and central aspect of action to optimize the tax structure.

Two decades of tax-sharing system reform in China:a comparative study

Two decades have passed since the Tax-sharing System Reform began in China.We discuss deep-seated problems in the financial management system.We contend that from the point of fiscal relations among different levels of government,the marked decline of the central government’s fiscal revenue as a share of the national total indicates that the macroeconomic regulation and control function of the central government has weakened;from the point of the form of fiscal revenue,the constant downward trend of the proportion of the tax revenue indicates that the old problem of excessive types of fiscal revenue forms have reappeared;from the perspective of tax structure,although the proportion of direct taxes has grown,turnover tax continues to account for the majority of tax revenue and the unbalanced dual-subject tax system has changed little,which indicates China’s tax structure has brought about stagnation.We believe that China’s tax reform should be incorporated into the medium-term fiscal planning in order to solve deep-seated problems in operation of the financial management system.

A Study on the Income Redistribution Effect of China’s 2018 Personal Income Tax Reform

Personal income tax is an important redistribution tool,its redistribution effect has been concerned by all walks of life.Using CHIP2018,this paper calculates and analyzes the income redistribution effect of the personal income tax reform plan in 2018,and fi nds that:The comprehensive taxation can raise the average tax rate,progressivity and redistribution effect of personal income tax;The rise of the standard of basic deduction,six special additional deductions,and the change of tax rate structure raise the progressiveness of personal income tax,but reduce the average tax rate and thus weaken the income redistribution effect of personal income tax;The comprehensive income tax will enhance the impact of basic deduction of expenses,six special additional deductions and the change of tax rate structure on the redistribution effect of individual income tax income;Under the joint action of the reform measures,the progressivity of individual income tax has risen as a whole,but the average tax rate of individual income tax and redistribution index have shown a sharp decline,both of which decreased by more than 50%.Using the household survey data of the year of reform,this paper comprehensively investigates the income redistribution effect of the personal income tax reform,which enriches the research on the redistribution effect of the new round of personal income tax reform.