Research On The Effect Of Tax On Residents’ Income Distribution

Guided by the principle of "giving priority to efficiency with dueconsideration to fairness" during the transition period, the residents haveobtained a substantial increase in overall income levels, however, thepattern of income distribution among the residents has also changed. Thecurrent income distribution gap is too big a problem that attracts closeattention of the communities, and doesn’t conform to the idea of building aharmonious society in China. If only rely on spontaneous adjustment ofmarket mechanism, the government does not regulate, it certainly will affectthe economic development and social stability, and bring about unfaircompetition for the social members on the starting line, then may cause the"Matthew effect" about the income gap, that is, the concentration ratio towealth will go higher, the disparity is becoming larger and lead topolarization between the rich and the poor.Therefore, in the current situation of residents’ income distributionpattern which is not optimistic, narrowing the income gap of residents, andpromoting fair income distribution has be put on the agenda as a verycomplicated and systematic project. Fiscal policy should play an active rolein the regulation of income distribution. Tax plays its full role in thedifferent segments of residents’ income, it has its own uniqueness inpromoting the fairness of the income distribution.Based on review of related concepts and basic theories and viewpointsof tax transfer and burden, this paper constructs a theoretical model basedon the principle of fairness. Firstly, it starts from the facts that our incomedistribution gap is too large, that is, figures out a whole picture of China’sincome distribution, by respectively from the perspectives of urban-ruralincome gap, regional income gap and industrial income gap, then conducts a general survey on the present situation of relevant tax regulating incomedistribution. Secondly, the article uses alternative method, select sevenportions of urban residents’ income data in China Statistical Yearbook from2001to2012to do quantitative research and evaluation on tax regulatingeffect to revenue. The paper analyzes the effect of tax regulating residents’income gap from two dimensions of theoretical analysis and empirical study.Lastly, on the basis of learning from domestic and foreign relevant researchand practice experience, it puts forward some relevant finance-taxationrecommendations from perspectives of tax model, the turnover tax system,personal income tax system, tax regulation system to optimize the pattern ofChinese income distribution.