Taxation's Regulatory Function On Personal Income Distribution In China

Personal income distribution is a very important index to measure a nation's social and economic development. It can not only affect the stable and persist development of society, but also make great influence on people's benefit. In China, after more than 20 years' reform and opening to the outside world, great changes have taken place with income distribution. Especially in recent years, statistic data from many different research institutions indicate that Chinese Gini coefficient is close to or even outstrip 0.4, which is regarded as security line of income gap all over the world. Under the circumstances to pursue comparatively good living standard, the widening income gap gradually became a topic of general interest in China.The variety of income gap in China follows the law of "expending in pace with economic growth". Meanwhile, it is related to the special reason of system reform in much degree. For the sake of economic growth, the centrally planned system was substituted with market-oriented system. And the distribution system also changed from "distribution according to work" to "distribution in line with all kinds of productive factors". As a result, the income gap expended unavoidably. Added into other factors such as different initial conditions, partial macro policies and unequal competition, the imbalance of income distribution is aggravated.At present, the key problems of income distribution mainly included huge gap between urban and rural areas, rapidly swelling illegal and unreasonable income, worsen situation on the impoverished people, people's imbalanced psychology, etc. Contributing the progress of reform, it is predicted that the trend of widening income gap will go on in the near future. Consequently, the contradictions in income distribution will be more and more intense. For this reason, it is high time to deal with the questions and make the income distribution more equal and reasonable.The imbalance in personal income distribution is one form of "market failure". So it is within the scope of macro controls. As a matter of fact, each government in the world wields many kinds of legal and economic tools to regulate personal income distribution. Taxation is one of the most often used and effective tools in market economy. In most developed countries, the governments generally set up a comprehensive, all-round tax system which is mainly consist of personal income tax, estate and gift tax, security tax to regulate income distribution. And personal income tax usually hold a dominant position in the whole tax system. Besides the consummate institutional arrangement of tax system, the strict and efficient tax collection andadministration ensure distinguished effect of regulation on income distribution.However, the situation in our country is not so well. There are many problems to be solved imperatively. First of all, some absent tax categories including estate and gift tax, security tax destructed the completeness of regulative system. It leads to "void areas" in regulating the income distribution. Secondly, existing tax system emphasizes revenue generating function much more than income regulation function. So the percent of income taxes, especially personal income tax seems lower than rational standard. Thirdly, flaws of personal income tax, consumption tax and agricultural tax restrict the controls on income gap. Fourthly, developing employment and education is very benefit to narrow income gap nowadays, but the tax preference policies on them are both too limited . Fifthly, the backward tax collection and administration weaken the regulative function even more because of people's light taxation awareness.It is thus obvious that we must solve the problems of existing tax system to improve the regulation on income distribution. From now on, it shall be the focal point of taxation work for its important and practical significance.After the analyses and demonstration above, the writer shows subjective measures to solve the problems. The first one is to replenish tax system b...