The International Experience of Personal Income Tax Reform and China's Practice

Abstract

Individual income tax plays an important role in China's tax structure. The reform of personal income tax has always been the focus of China's tax reform. However, there are still some problems in China’s personal income tax system. It does not play its due role in regulating income distribution. This paper focuses on the tax system of taxable unit, expense deduction standard, tax rate and so on in the United States and Japan. And proposes that in the process of individual income tax reform in China, it is necessary to perfect the tax collection and management system, improve the expense deduction standard, and adjust the tax rate structure. It is recommended that accelerating the establishment of a mixed tax system for individual income tax in China and a shift from individual taxable units to family-based taxable units.