Individual Income Tax Reform and Wealth Redistribution in China

The immature of the contemporary Chinese individual income tax (IIT) system induce the unjustified wealth redistribution to some extent. This article would not only analysis the relationships between the individual income tax and the wealth redistribution in China, but also positions the defects in the current Chinese IIT system. Apart from that, after referencing the foreign IIT mechanisms and analysis their advanced ideas, the author combines foreign experience with the Chinese native conditions in order to advise for introducing both the classification-consolidated IIT leaving system and the rational deduction system to the current Chinese IIT legal system. The scope of the Chinese IIT is suggested to be wider and the electronic tax leaving and information collection systems would also be the developmental direction of the future Chinese IIT system. All these reforms suggested are beneficial to the fairness of the current Chinese IIT legal system and they would enable the Chinese IIT legal system better achieving its wealth redistribution function.