Impact Of The Tax On Individual Income Redistribution Efficiency

The country’s existence is inseparable from the tax, because it takes revenue to the state andregulates the distribution of national income. There are serious polarization problems both indeveloped and developing countries. Hence, adjust the distribution of national income is alwaysone of the most important topics of the government, which is also an irreplaceable area ofscience research. This paper aims to study redistribution effect of tax to the individual incomefrom the view of design of taxation system. The main concern is to analyze the structure of taxsystem through models and empirical analysis.In this paper, a tax models and an empirical analysis are presented. the tax models portraythe relationship between the structure of tax system and the efficiency of tax redistribution. Theconclusion shows that under a progressive tax system, the tax rate and tax redistributionefficiency are positively correlated, and they are negatively correlated in the regressive taxsystem. Furthermore, there is an optimal tax exemption volume to get the maximum efficiency oftax redistribution.We also use empirical analysis to verify the conclusion of theoretical analysis and therelationship between tax policy and the change of efficiency of tax redistribution. The conclusionshows that for a progressive (regressive) tax system, the efficiency of tax redistribution increase(decreases) with increases in average and marginal tax rate, so does the total number of taxbrackets. From a macro perspective, the efficiency of tax redistribution is more sensitive to theaverage tax rate than to others.Our research explains some results which haven’t been explained with existed theoreticalresearch. So this paper can be deemed as a good supplement of existing research and hassignificant implications for establishing reasonable tax system to improve level of efficiency oftax redistribution.