The Impact Of Income Tax Adjustment On Resident Income And Urban-Rural Gap

In this paper, the author according to the recent years, the topic of residents’ income gap widening as the research Angle of view, using a computable general equilibrium model, a very powerful analytic tool for the study of fiscal policy, analysis corporate income tax and personal income tax reform’s influence on the urban and rural residents’income distribution.First of all, according to the actual conditions of China built a dynamic recursive computable general equilibrium model, the model divides the residents department for urban and rural residents module research. In order to clear tax adjustment effect, in the process of constructing tax CGE, the author put the tax section to classify and define.Then, the authors refer to the statistical yearbook, cash flow statement, financial yearbook and customs yearbook data information, using the line item balance processing method, compiled Chinese social accounting matrix. The advantage of select line balance method is to make sure that the source data integrity, will not lead to important data excessive distortion in SAM.Finally, the author according to the dynamic recursive CGE model research analyzes the income tax policy adjustment to the long-term and short-term effects of macroeconomic indicators, including the residents income distribution, import and export, output and corporate investment.Simulation results show that the short-term:First, GDP and total merchandise exports are substantially independent of changes in personal income tax rates; Second, when the lower income tax rate, urban and rural incomes increase, on the contrary, reduced income urban and rural residents; Third, reduce the personal income tax rate led to urban-rural income gap, improve corporate income tax rate has caused urban-rural income ratio decreased; Finally, corporate income tax and personal income tax rate changes on the urban-rural income gap affects rendering reverse effect.Long-term trends, if the income tax policy don’t reform, urban and rural residents income gap will further widen, wealth more concentrated to urban residents, rural residents income level ascending slowly. Reduce the personal income tax rate is not conducive to narrow the gap between the income of urban and rural residents, but to increase imports, further narrowing the trade surplus, to maintain international account balance, reduce the pressure of RMB appreciation. Reduce the corporate income tax rate is conducive to balanced economic growth, improve the income of urban and rural residents, however, the adjustment role of urban and rural residents income distribution is very small.Finally, the personal income tax rate unchanged or slightly improve the personal income tax rate, reduce the enterprise income tax at the same time, not only reduce the government revenue, but also can keep the income of urban and rural residents don’t appear significantly lower case, narrow the gap between the income of urban and rural residents.Therefore, if the fiscal policy is to keep the personal income tax rate unchanged, or slightly improve the personal income tax rate, reduce the enterprise income tax at the same time, the simulation results is not only reduce the government revenue, but also can keep the city residents income does not appear obviously decrease, narrow the gap between the income of urban and rural residents.Comprehensive consideration, the best enhance residents’ social welfare fiscal policy is to keep the personal income tax rate unchanged, and reduce the corporate income tax rate, strengthen the personal income tax collection, and improve the government’s social insurance and protection of rural residents.