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The Individual Income Tax is the tax that imposed on all kinds of taxable income obtained by individuals in a certain period. Since it started from Britain, in 1799, individual income tax has already been paid attention to by all the countries around the world, and developed as one of the main taxes in many developed countries. As a kind of "modern tax", it is playing an important role in both collecting fiscal revenues and making income distribution fair.In China, since 1980, after several times of adjustment, the individual income tax system becomes more and more scientific and standardized, and has made its contributions to increasing fiscal revenue and adjusting income distribution in the society. However, with the economic development and social progress, there have existed many faults in the individual income tax system. During the past 20 years, the revenue scale has been rising rapidly, by the faults of present system cannot make it function, even hamper the development of the economy, it is urgent to reform.Standing by reality of our economic development and tax system, with the advanced experience of various foreign countries for reference, this paper will explore the direction, the policy design and the optimize means for our individual income tax.The full text is composed of four parts:Part A:Literature review discusses previous research on the function and system of individual income tax, and the direction of our country’s reform.Part B:This paper gives an introduction of 3 different collection models of individual income tax on theoretical basis, and analyzes the advantages and disadvantages of each model from several angles.Part C:After a simple overview, the paper focuses on the faults of our present individual income tax system, including its weakness in regulating income distribution and its faults in the collection models, the range of the taxation, the starting spot, the tax rate, etc.Part D:The paper first gives conclusions about the learning from advanced experience of United States, Japan and India, and then puts forward brilliant thoughts and concrete measures on building and improving our individual income tax system.
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