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Weakened Redistributive Effects of Personal Income Tax in China
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TitleWeakened Redistributive Effects of Personal Income Tax in China  
AuthorYue Ximing,Xu Jing,Liu Qian,Ding Sheng and Dong Lijuan  
OrganizationRenmin University of China;;  
Key Wordspersonal income tax; redistributive effects; progressivity; effective rate of tax 
AbstractObjective of this study is to evaluate redistributive effects of personal income tax implemented last September in China. We decompose, for the first time, the MT index by income components, in order to investigate deduction and rate of tax of each itemized taxable income component on redistributive role of the personal income tax as a whole. Main conclusion from this study includes that while the reform increased progressivity, it reduced effective rate of tax and, eventually, weakened redistributive role of the personal income tax, and that given deductions and rates of tax for other taxable income components constant, raising deduction of wage and salary (dominant component of the taxable income) increases the progressivity of the total personal income tax first, and reduce it then.  
Serial NumberWP277 
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