The Study On Income Redistribution Of Taxation In China

Thanks to the gradually market-oriented reform since 1978,China's economy has made a great progress.The living situation and welfare standard of its residents have been significantly increased,and anti-poverty programs has made a great success.However,since the achievement of economic growth can not spontaneously benefit every social groups,the income gap has becoming much wider at the same time.This will cause a large amount of social problem and become a threat of social stability.Therefore,a series of public policies have been made to narrow the income gap and improve the social fairness.Redistribution policy tools can be divided into two categories:Tax and public expenditure.Tax revenue are the prerequisite of public expenditure and the basis of government income redistribution.Instead of inducing the unfair income distribution,tax policy in china has even deteriorated the income gap.In the context of China's social and economic transformation,how could taxsystem affect the income redistribution?What is the fundamental cause of such effect?How to use tax policies to narrow the income gap and maintain social stability?Those are difficult task faced by china's government in the long term.In this thesis,we adopt the research thinking in the method of "theoretical study--institution study--empirical study--countermeasure research",and take fully use of the measure of "literature research","normative analysis" and "empirical analysis".In briefourpaper is composed of the following content:First,an objective analysis of the unfair income distribution situation are put forward.The income gap between urban and rural residents has been constantly extended over the past decades.Compared with the urban area,the degree of income inequality is higher within the rural area.The wage gap among different regions caused by unbalanced regional development is the major cause of population migration from countryside to cities and from the western developing area to the eastern coastal developed regions of China.Immigrants' income is growing slowly,most of whom are self-employed or engaged in low-end services.The income gap between different occupations is huge,and income in monopoly industry is overwhelming.Poverty is still a grim problem within rural area than urban area.Second,a comprehensive analysis of the internal relations between the socio-economic system and the redistribution function of tax during the transition period are put forward.The socio-economic structure is the external basis of tax system.Some factors of it have negative effects on the redistribution function of tax,such as unbalanced regional development,economic decentralization and political centralization.Basically,tax reforms are oriented toward increasing tax revenue and improving economic efficiency,the purpose of adjusting income redistribution is not sufficient.Phenomenen,such as the intergovernmental financial imbalances,Tax depressions and the failure of tax resource allocation,which are originated institutionally from the foregoing factors of socio-economic structure,have negative effects on the redistribution function of tax.Third,we calculate the income redistribution effect of indirect tax and generational inequality.Use input-output model to calculate the indirect tax burden in various industries.We can estimate the household indirect tax burden by investigating the classification of household expenses and get the progressive index of indirect tax and the effect of household income redistribution.Tax burden for family members at different ages can also be captured.The result shows that the Kakwani coefficient of indirect tax is negative.The indirect tax burden of low-income families is significantly higher than that of high-income families.Although,the indirect tax system exists the contrary adjustment to the income distribution,the negative effect is not significant.By calculating the MT index,the Gini coefficient increased by approximately 1%due to indirect tax.The indirect tax allocated unfairly among different generation,the indirect tax burden for children under 18 years old is about 40%of adults between 18-60 years old,and the tax burden for the elderly over 60 is close to 60%of adults.Therefore,it is useless to adjusting only one type of tax for narrowing the residents' income gap.Fourth,we constructed an age-adjusted Gini coefficient.Using the household equivalent scale adjustment method,the income inequality both among the peers and the households are measured respectively.At the same time,the redistribution effect of personal income tax and social insurance premium is further investigated.The results are as follows:The Gini coefficient of personal income is 0.45.The age-adjusted Gini coefficient is 0.47,and the Gini coefficient of household income is 0.44.The income gap is bigger among the peers,while slightly smaller among households.The income distribution adjustment function of personal income tax is not significant,the income redistribution effect of personal income and households'income are respectively 1.17%and 1.9%.After incorporating into social insurance premiums,the "big caliber" income redistribution effect of personal income tax reached approximately 1.85%and 2.7%.Compared with developed countries,the Progressive degree of personal income tax is not low.The main reason for the weak distribution effect of income gap is that the average tax rate of personal income tax is excessive low.Fifth,the government obtains part of the profits from enterprises through corporate income tax,which indirectly affect resident's income.At the same time,due to the problem of internal agents,evasion behavior of corporate income tax will be transmitted to the income gap between executives and ordinary employees.In the implementing mode of cooperative social contract,government behavior plays an important role in resource allocation,which affects the corporate income tax.Based on the data of non-financial listed companies from 2005 to 2013 in Shanghai and Shenzhen Stock Market,this paper discusses the influence of political promotion,corporate political association and risk uncertainty on corporate tax avoidance.We find that political turnover enhances tax enforcement and decrease tax aggressiveness due to two main reasons.Firstly,new leaders will increase tax enforcement because of promotion incentives and enterprise' political connection failure.Tax administration and enforcement in China can be subjective and selective.So the government leaders can control tax revenues to some degree.Secondly,enterprise will take cautious steps of tax avoidance while facing policy,market and political risk uncertainty.Sixth,we put forward severe suggestions about how to strengthen the redistribution function of tax system.Firstly,the government should improve the external environment of the redistribution function of tax system by completing the socio-economic structure.At the same time,Regulate and adjust the tax structure,transforming the main tax should from indirect tax to direct tax.Secondly,Reduce the macro-tax burden and the scale of other non-tax revenue to benefit the low-income groups.Thirdly,levy property tax,estate tax and gift tax at the right timing to increasing the tax burden of high-income groups.Finally,Strengthen the construction of tax collection and management system,and cut down the unregulated income in the tax department,reducing the personal intervention to the tax collection and management.