Empirical Study on the Income Redistributive Effect of Personal Income Tax in China

To what extent could personal income tax redistribute individuals’ income is decided by the progressivity and average tax rate of the tax system. This article analyzed the redistributive effect of personal income tax in China from these two aspects and obtained the following three judgments basically: First, the legal and actual progressivity of personal income tax have already reached the developed country’s level; Second, the average tax rate of personal income tax is significantly lower than the average rate in the world; Third, the income redistributive effect of personal income tax is very small compared to other countries. And the core reason is the too low average tax rate. Therefore, the key point to strengthen the redistributive function of personal income tax in China is to improve the tax administration, expand the tax base and increase the average rate of personal income tax to individuals’ income.