The Affect Of Financial Metastatic Expenditure Structure On Urban And Rural Income Gap

The reform and open policy has brought us Chinese rapid economic development.But while the rapid growth of the GDP, the income distribution is seriousimbalance,and the condition of the urban-rural income gap is particularly serious.Urban-rural income ratio reached3.33in2009，in recent years it is also more than3.1.Serious urban-rural income distribution imbalance will not only hinder thedevelopment of the economy, but also not conducive to social harmony and stability.Market competition and efficiency mechanisms inevitably divide rich and poor, thenecessary policy instruments should really solve the problem. Timely adjustment ofthe structure of fiscal expenditure is the specific performance of the functions of thefinancial regulation uneven distribution of income. Adjustment of the structure of thefinancial metastatic expenditure is the important part of the financial expenditure, andit will play a decisive role to adjust the widening status of urban-rural incomedistribution gap. Based on all above, the purpose of this study is to find out the reasonwhy the effect of financial metastatic expenditure to urban and rural incomedistribution is not obvious, and finally we can give out appropriate recommendationsfor the adjustment of the structure of the financial metastatic expenditureThis article theoretically analyzed the theoretical basis of financial metastaticexpenditure regulate the urban-rural income gap. Financial metastatic expendituresshould have a significant positive effect on narrowing the income gap between urbanand rural areas. And then we combined the data of1990-2011, used multipleregression time series model, find out three reasons why the effect of financialmetastatic expenditure to urban and rural income distribution is not obvious:(1) Thesize of social security expenditure is small, and the structure of it is unreasonable too.Funding for administrative institutions retirees is higher than minimum living securityexpenditure for low-income people;(2) Because the input of policy subsidies isdecreasing, its prominent role does not show，and expenditure to stabilize the priceand food price has a smaller proportion;(3) Tax expenditures is not a apparent role innarrowing the gap in income distribution of urban and rural residents. This is mainlybecause of the irrational structure of the tax system, the proportion of direct taxes toolow and the lack of specificity for rural of preferential tax policies.Finally, We have following policy recommendations: increase the proportion ofsocial security expenditure, establish urban and rural social security system; strengthen the effect of policy-related subsidies spending, optimize the policy-relatedsubsidies structure; reform of the tax system and targeted to rural.This article have unique pointcut and perspective, expand the field of study of thefinancial metastatic spending impact on the urban-rural income gap.