Research On The Income Redistribution Effect Of Chinese Taxation System

The central issue of the income redistribution problem is the inequity of its system. With the rapid development of the world's second-largest economy, the residents'disposable income in China increases sharply in recent years. At the same time, the wealth gap in China is widening, along with the gradually declining ratio of residents'income to GDP. Structural poverty forms a huge contrast to Chinese economic miracle. The continued enlargement of income gap among different groups will not only reduce the safety and potentials of Chinese economy, but also becomes one obstacle to the development and stability of the whole society. As one of the major policy tool in government income redistribution system, taxation is a considerable measure to narrow the wealth gap and to promote the social equity. The tax revenue maintains a high-speed growth momentum in recent years, far beyond the growth rate of GDP. However, the growth of tax revenue has not play an active role in the income redistribution. Rather, the income gap is expanding in all aspects and multi-levels. The Gini coefficient increased from0.18in the early reform and opening-up times to0.43in2009, and is still on the rise. In the long-term taxation practices, there may be various causes of the problem, such as the unreasonable tax amount, the unscientific taxation structure, flawed categories of tax design and the poor management of tax collection. Study on the income redistribution effect of Chinese taxation system will make a deep impact on improving the unfairness of income redistribution. From the angles of three influencing factors (tax revenue scale, tax structure and the tax collection efficiency), this paper carries out an empirical research on the income redistribution effects of the taxation system, and makes a quantitative analysis of their relations, so as to provide more visualized references to push forward the reform of income redistribution and taxation system in China.On the basis of conducting a fundamental discussion and a related theory analysis of the income redistribution effect, this paper uses the panel data of different provinces in China to carry out a empirical analysis and evaluation on the income redistribution effect of the tax revenue scale, tax structure and tax collection efficiency. The structure of this paper is organized as follows:The first chapter is the introduction. This chapter mainly elaborates the significance of the subject and its research background. Based on the review of the related literatures, this paper analyzes the research status and the development tendency of this topic, and makes a summary of the framework and approach of this research. The second chapter is the fundamental theory analysis. This chapter illustrates the related concepts and contents, in order to further clarify the research subjects. Besides, overview on the tax equity theory, the excess burden theory, the optimal taxation theory, the tax price compensation theory and other related theories, builds a profound theory background for this research. The third chapter makes an analysis on the tax policy regulation of income redistribution, under the background of Chinese institutional transition. This chapter mainly reviews the impact of tax system reform on the income redistribution. The fourth conducts a empirical analysis on the total effects of the income redistribution of Chinese taxation system, and primarily uses the panel data approach to empirically examine the impact of the total tax revenue on the residents' revenue gap. The fifth chapter carries out empirical analysis on the income redistribution effect of tax revenue structure, and uses the panel data approach to empirically examine the impact of the tax revenue structure on the residents'revenue gap. The sixth chapter makes empirical analysis on the income redistribution effect of Chinese tax collection efficiency, and uses the panel data approach and the Malmquist Index Model to empirically examine the impact of the tax collection efficiency on the residents' revenue gap. The seventh chapter is the conclusion and the policy recommendation.This paper mainly concludes that:1.Whether to focus on absolute or relative value, the tax revenue in China plays a reverse role in bridging the residents' revenue gap, which means more tax, larger revenue gap. Registered urban unemployment rate and the proportion of secondary to tertiary industry play positive role in narrowing the income redistribution gap, which is the increase of the two variables will widen the residents' income gap. Moreover, the variable of per capital GDP, which reflects on the level of economic development, plays a significant role in residents' income redistribution, which means that, as per capital GDP increases, the income redistribution gap will be bridged;2. In different categories of tax revenue, whether it be a absolute value or proportion number, the turnover tax revenue plays a positive role in bridging the residents' income gap between urban and rural area, which means that, the higher of the turnover tax revenue, the broader residents' income gap will be; in contrast to the hypothesis of this paper, the income tax revenue has no significant influence on the residents' income gap; the property tax revenue has significant influence on the resident's income, but the increase in property tax revenue could not effectively narrow the residents' income gap; resources tax revenue has no significant influence on the residents' income gap. The empirical results of control variables indicate that the private sector employees number proportion have significant influence on residents' income gap, the increases of the variable will enlarge the income gap between the urban and rural residents;3. The variation value of tax collection efficiency in China has no significant influence on the gap of the residents' income redistribution; while in other control variables, the proportion of secondary to tertiary industry has a significant positive effect on the gap of income redistribution between the urban and rural residents, which means the increase of the variable will be stack in favor of bridging the residents' income gap; the variable of per capital GDP has a significant negative influence on the gap of income redistribution between the urban and rural residents, which means when per capital GDP increases, the gap of income redistribution between urban and rural residents will be narrowed.