Research On The Effects Of Tax Structure On Residents’ Income Distribution

As the pioneer development economics, Arthur Lewis, say "the change of the income distribution is the most politically significant in the process of economic development", China have created the economic boom that astonish the world wonders, but at the same time, is facing serious imbalance of income distribution. "the country is strong but the people are not rich", "not few but uneven", these have to be solved and cause the attention from all walks of life. Cobwebs and explore its roots, it is the reason that the original share sharing imbalance in China’s economic development path accumulated over a long period: one part of the group to share the cost are more and the other part of the group to share results are more. So it is difficult to equal sharing development achievements for each resident. It characterized by that household income is low in national income and the income gap is large between residents.Since the reform and opening up in China, the share of tax bearing sharing oriented throughout the whole of the economic transformation path. Tax is the collection of tax law credibility, mandatory public power, policy execution power, economic leverage, and tax contact macroeconomic policy and the microeconomic behavior closely. Tax is not only to raise revenue, also to play a role of income redistribution and the allocation of resources. Tax structure is the draw mode of government from other economic units, and it reflects the institutional arrangements of sharing in the society. At the same time tax is the interaction between government and citizen most frequently as a policy tool. When the amount of tax is certain, tax structure are about tax from different departments, the extraction of different distribution, the distribution of elements in different income tax, the tax burden of different income groups, which affect residents sector’s share of national income and the income distribution between residents. Although the tax structure is not determinants of income distribution, but the impact of share-oriented they are not directly observable inherent in the distribution of income generated quite a lot. Therefore, in improving governance systems and improve national governance reforms deepen period, it is necessary that tax structure will be taken into account of income distribution based on the sharing shared perspective.But existing research generally separate the primary distribution from redistribution,separate the indirect tax from direct tax,or only study distribution effects of a single tax. It is limited to the research on the impact of economic growth even considering from comprehensive tax structure.The study of the impact of tax structure to income distribution is rare.This paper will study the impact of tax structure to residents’ income distribution based on sharing share perspectives, which is different from previous research.As a classic of the optimal tax structure theory, Atkinson-Stiglitz theorem argues that the best way to realize the income distribution is a direct tax on income, and through indirect tax which manipulation the products and services price to realize income distribution will cause deadweight loss. According to this theory, the developed with direct tax-based tax structure, income distribution problem is not as serious as imagined. Moreover, China’s tax structure to the contrary, the income distribution is having a severe double imbalance. Thus the author thought: what is relation between tax structure and income distribution, how the intrinsic link exists? What is the mechanism of the tax structure on income distribution, what is the impact direction, and how is the extent of impact? What are income distribution effects of dynamic regulation of the tax structure? What is the tax structure in a reasonable sharing sharing? Which are foreign mature experiences worth learning in future. What are the implications of tax reform of China?Based on tax state distribution theory, tax share fair distribution and sharing economics, the paper reviews the reality of the tax structure and income distribution in development path of China’s economy. The paper put forward that tax structure influence the pattern of income distribution in our country through the share of share orientation. The economic leverage which tax structure affect the basic economic distribution system, is throughout the society to participate in product and income distribution. In the macro level, the nature of the tax structure is the relationship of the initial distribution based on the ownership of production factors and between the tax redistribution based on national public power, reflected in the allocation of factor of production. Therefore I focus on allocation of factor of how tax structure by conduction, influence the residents income share. In the micro level, the nature of the tax structure, and it is the tax system design of what form, taxation to whom, who bear, which reflects final tax incidence. Therefore I focus on how the tax structure affect residents’ income gap through tax burden between residents. Further this paper does empirical research constructing the tax structure a long-term dynamic change coefficient. And then study overseas representative of three typical patterns: United States "Anglo- Saxon model", Germany "Rhine mode", "east Asian model" in Japan, and obtain what we can learn from the experience by comparing.This article main work is that the tax structure is broken down, trying to build different angles tax structure decomposition index, to study its approach, direction of impact, influence degree of the tax structure change and its impact on residents income share and gap. On the specific research method, this article uses national income accounting methods do index decomposition to research elements income and tax payment, uses the panel data model to empirical research on macro tax structure to the influence of residents’ income share; uses input-output model to analyze residents’ tax incidence under indirect tax shift, uses MT index and taxes-income share ratio coefficient to research redistribution effect personal income tax; uses the time series of OLS to study the influence of micro tax structure on residents’ income gap. Also use the method of typical cases, vertical traceability comparison and econometric methods such as ARDL model, VAR models.From macroscopic level, tax participation degree of initial distribution in China has been more than 15%, higher than reference country shown through tracing method comparison and comparison of considering tax system differences, and directly squeezing labor remuneration share of residents. In redistribution, tax payments paid by labor factor income are higher than by capital elements income, and labor factor income bears the main part of the residents’ income tax increment. The tax system structure that high production taxes and low income taxes makes two overplay to push residents income share down. At the same time, residents source of income relying heavily on labor factor income, has further aggravated that the tax structure has the negative impact on the residents’ income share. After controlling factors of economic development, fiscal expenditure, human capital and the degree of marketization etc, nationally, impact strength of three tax structure index from strong to weak is, tax participation degree structure of initial distribution, tax system structure of income tax and production tax, taxation structure of redistribution elements. From the impact direction, that net production taxes of initial distribution are too high and the proportion of taxation on labor income is high all have pushed residents’ income share down, when increasing the income tax proportion of redistribution link would increase the residents’ income distribution share. From regional point, tax participation degree structure of initial distribution is still the strongest influence variable on the eastern, central and western three regions, and tax payment structure of redistribution elements in eastern region has larger Impact strength than in central and western region.From the micro level, actual dependency ratio of indirect tax accompanied by transaction basicly presents incomplete regressive nature, while low and middle income group residents bear heavier actual tax burden of indirect tax. Distribution effects of indirect tax reducing the gap are negative, despite of the weakening trend, but still widening the residents income gap. While for individual income tax of direct tax, classified collection leads that the same income has the different payment of taxes due to the different origins, and working-class bears the inappropriate tax burdens relating to the income share, losing the transverse fairness. Taxes-income share ratio coefficient of high-income group and low-income group respectively is 0.99 and 1.04, and low-income residents’ tax share has exceeded their income share, lacking of vertical fairness. Individual income tax system design flaws and taxation income structure weaking, cause the MT index of individual income tax small and redistribution effect weak. Empirical research on further divided tax structure into four indexes found that, after considering the level of economic development and marketization degree, property tax ratio, income tax proportion, personal income tax accounted for the proportion of income tax and turnover tax proportion every increase one percentage point, the gini coefficient decreased respectively 0.0019, 0.0008, 0.0002 and up 0.0003. Indirect taxation internal function goal difference and the residents’ consumption structure heterogeneity, and structure issues that direct tax overly dependent on the personal income tax, are not conducive to narrow the income gap.From the long-term dynamic perspective, the paper builds tax structure change coefficient based on tax changes fair. Based on the fairness of income distribution, the paper considers many indicators into tax structure fairness index group such as the proportion of indirect and direct tax, the proportion of commodity tax and income taxes on total tax revenue, proportion of individual income tax in income tax, x proportion of tax on labor elements in individual income. And then measures the changes. Through the empirical study on ARDL model and VAR model, the paper finds that the direction of tax structure adjustment is consistent, no matter to increase the share of income, or to narrow the gap in income, that is to say to increase direct tax for residents’ income and property and to reduce indirect taxes for trading and prices. But there are different pathways and time lag of policy impact between them. So when formulating and implementing policies, consistency of influence of tax structure on the two kinds of distribution should be considered, and to discriminate them to increase policy goals.Judging from foreign experience, based on the various countries tax structure evolution, the paper organizes the cross section data of tax structure and the income distribution in 35 countries with different economic development levels, and compares and finds that direct tax proportion of our country’s is far lower than the general rule of the world. Further the paper analyzes the common characteristics of the United States "Anglo- Saxon model", Germany "Rhine model", and Japan’s "east Asian model" by typical case method. These include that less government intervention tax involved in primary distribution, labor remuneration is quite high; residents’ income share is high;direct tax structure of income tax and property tax is reasonable;The tax adjustment in redistribution is effective. The paper put forward what lessons our country can draw from Germany’s Rhine pattern to tax reform.Based on the above theoretical research and empirical research, this article concludes that are beneficial to the allocation of tax structure to deal with several structural balance, including the structure link tax participation of the initial distribution and redistribution, the structure of the capital factor and labor factor to pay tax, tax structure adjustment to consider regional differences, tax structure to share in the different groups of indirect, tax structure to share in different income residents personal income tax, internal structure of the direct tax to enhance redistribution effect This article finally proposes the tentative idea of constructing reasonable share sharing allocation mechanism, proposed from the perspectives of share sharing about the reform of the taxation structure, to solve the problem of distribution, to realize the reasonable sharing and fair share in economic development to provide the reference.In this paper, the research content of structure arrangement, in addition to the introduction, conclusion and prospect, which is divided into seven chapters. Chapter 1 is the tax and the theoretical analysis of income distribution to describes the theoretical basis of full text. Chapter 2 is the reality and evolution analysis of tax structure and the residents’ income distribution to put forward the tax structure by element allocation and tax burden sharing two way transmission, with its share of sharing oriented affect residents’ income distribution. Chapter 3 is the tax structure, element distribution and resident income distribution, to study how tax structure effects on residents income share through allocation of factor. Chapter 4 is tax structure, tax burden and the income gap of residents to study how tax structure impact on the residents’ income gap through tax burden. Chapter 5 is a dynamic change the long-term impact of tax structure, from the perspective of long-term dynamic research tax structure change on the impact of income distribution. Chapter 6 is compared with the foreign tax structure and income distribution in the typical pattern. Chapter 7 is to build a share sharing allocation mechanism of tax reform to summarizes the results and put forward policy Suggestions.On the basis of predecessors’ research results, this paper tries to innovate in the following aspects:1. The focus of China’s income distribution imbalance in the tax structure under the perspective of sharing share. Previous studies separate the indirect from direct tax,it was easy to hide the nature.In essence, tax structure contains the Sharing Share guidance, it reflects the tax distribution in different departments, the different distribution of extraction, between the different factor income tax, tax burden in different income groups. Tax structure is a kind of sharing, sharing and fairness of income distribution is economic achievements. The contribution of this paper is to combine the reality of China’s economic development path, to put forward the two the impact transmission ways----by element allocation and tax incidence, and to build the bridge between tax structure and residents’ income distribution, to make up for the deficiencies in existing research.2. Analyze our country residents income percentage of national income by tax structure. Previous research distinguished the primary distribution and redistribution so that it is disadvantage to conduct macroeconomic policy.In fact, the tax structure in macro, which is based on the ownership of production factors of initial distribution and based on national public power of the relationship between the tax revenue redistribution.This article link connected the two allocation, build tax structure indicators---- initial allocation of production tax, income tax redistribution and elements of tax structure. And study the influence the direction and extent of the influence of effects on the income tax structure share mechanism. So make up a lack of quantitative analysis on residents income share of domestic research.Decompose elements income and tax payment between residents, enterprises and government departments in the national income distribution, to link primary distribution and redistribution, to study the effect residents’ income share of changes of the initial allocation of production tax, income tax redistribution and elements of tax structure. Make up a lack of quantitative analysis on residents income share of domestic research.3. Build a comprehensive measure, quantify the impact of the tax structure to income distribution residents. Previous studies focus on a single tax index analysis of the influence of the income distribution system more and did not form a consensus.This paper make tax structure better play a role of adjusting distribution fair as the foothold build, in view of the residents’ income share and the gap between two levels of distribution imbalance,build a comprehensive index cluster about subjectivity distribution pattern and scale of the distribution pattern, about initial distribution and redistribution, about income size and income gap of residents. Make up for focused qualitative research or tax scale quantitative research and lack of insufficient structural studies of domestic research.