Study On Effects Of China’s Tax Regulating Resident Income Distribution

Under the conditions of market economy, unequal distribution of income is inevitablecaused by market failure, and therefore need the government to participate in theredistribution of income, which is a manifestation of the government to fulfill its basicfunctions. Tax, as an important tool of the government’s macroeconomic control, is playingan irreplaceable role of regulating the distribution of income.Based on the theory of tax regulating income distribution, this paper analyzes thestatus quo of China’s income distribution, as well as the moderating effects of taxation onincome distribution, and explores the reasons for the weakening of the tax regulatoryfunction, and then the optimization ideas. In the process of specific analysis, this paperchooses Gini coefficient, a measure of the income distribution gap in the internationalgeneric indicators, as a basis judgment for the effect of tax adjusting income distribution,mainly based on the analysis of pre-tax and after-tax Gini coefficient changes. About thechoice of tax, this paper selects personal income tax which has a direct regulation andconsumption tax which has a indirect regulation as an analytical object. The relationshipbetween these two taxes and income distribution is more closely representative. Throughanalysis, there is little regulation of China’s personal income tax on income distribution,and flaws in the consumption tax are also restricting its regulating effect. Therefore, it isnecessary to optimize China’s tax system in order to give full play to the tax the incomedistribution functions and then solve the problem of imbalance of income.