A Study On The Income Distribution Under The Inclusive Growth

Since the reform and openness, China has become the second largest economies through a fast development, meanwhile, income gap has been be expanding ceaselessly. Nowadays, because of Chinese GINI is close to0.5, the need of income distribution reform is being more desperate. Inclusive growth has gradually been known by Chinese since2009, domestic scholars started again to study how to balance between keeping effective economic growth and narrowing the income gap. More domestic scholars study the income distribution from the perspective of size distribution of income, research the current situation and reasons of urban and rural income gap and so on, however, given the Chinese current situation, this way is not suitable any more. Inclusive growth is a kind of development strategy which bases on the equal opportunity and makes more people participate in economic development and share the achievements of economic growth. The strategy argues that government should pay more attention to the disadvantaged groups.Firstly, the paper summarize the relationship theory between income distribution and economic development, and state what the inclusive growth is and how to balance the equity and efficiency; secondly, study the Chinese current situation of income disparities from the perspective of function income distribution, then the thesis empirically analyzes the adjusting effect of fiscal policy including individual income tax, turnover tax and expenditure for social security, and draw a conclusion that individual income tax plays an important role in adjusting the gap between low-income families and high-income families, nevertheless it plays non-significant role in adjusting the highest-income families, meanwhile, expenditure for social security plays a non-significant role in adjusting the gap between lowest-income families and highest-income families; low-income families bear a heavier value-added tax burden. Finally, the paper puts forward with suggestions of three aspects, those are initial distribution field, redistribution field and the third distribution field. In initial distribution field, the government should focus on equal opportunity, which include that go a further reform of state-owned enterprises and political system and make the market competition fair, deepen the reform of non-state-owned enterprises and protect the workers rights and develop the new-type labor-intensive industry which can provide more jobs. In the redistribution area, the government should pay more attention to the disadvantaged group by optimizing the income distribution through perfecting taxation structure. Besides, the government should improve the expenditure structure especially the expenditure for social and security, based on the above reform, we can strength the adjusting effect of fiscal policy. At last, in the third distribution, the government should introduce relevant laws to improve the society to get involved in charity, help the disadvantaged group and narrow the income difference in China.