Research On Tax Regulaiton Of Factor Income Distirbution

The deceasing of Chinese labor’s income share in recent years has been acceptedgenerally. And the absence of study on factor income distribution fails to achievesubstantive progress of size income distribution. The paper analyzes factor incomedistribution from the perspective of taxation. Based on the previous studies, this studyattempts to use theoretical and empirical method. The content and conclusions of thepaper are as follows:Based on defining conceptions of the factor and factor income distribution, thispaper studies the tax adjustment factor income distribution theory and mechanism bysummarizing the factor income distribution model including the Neoclassical,Neo-classical, Endogenous Growth, Market Failure, Hayek s Market Liberalism,Buchanan Constitutional. We can find that:(1) Government can be regarded asindependent factor with the labor and capital sharing of national income.(2) Primarydistribution plays an important role in a suitable and fairness income distribution byestablishing the basic pattern, and taxation works by affecting the labor prices andcapital prices, the government providing education, production, public facilities andother public goods endogening to labor and capital, as well as government asindependent factor.(3) On the framework of the endogenous growth model,government through the tax rate (production rate) which was born in the government’seconomic goals and the output elasticity significantly affect the elements of theincome distribution.The use of vector auto regression (VAR) and panel data (Panel Data) systemGeneralized Method of Moments (SYS-GMM) and the use of empirical data estimatethe moderating effectes of the tax on factor income distribution. Empirical studiesshow that:(1) In China in recent years labor factors in income primary distribution ofthe share of and labor factor the redistribution of income share of were shown to atrend of decline, the capital factor primary distribution of income share of and capitalfactor the redistribution of income share of to are table appear to out of the an upwardtrend in.(2) There are short-term and long-term dynamic relationship betweenindirect taxation and its main taxes and primary distribution of the factors.(3) VAT,Business Tax and Consumer Tax are beneficial to primary distribution of labor anddecrease the capital shares. Personal Income Tax and Enterprise Income Tax play anegative effect on the factor income reallocation, but it’s not obvious. The degree ofstate-owned monopolies and international trades are against primary distribution oflabor and good for the capital shares.(4) The decomposition of the urban and ruralresidents’ income gini coefficient of China results that the contribution degree ofIndirect taxation increases is greater than the proportion of direct taxes, and thecontribution of the primary distribution of capital is much larger than the share of thelabor factor and quasi-public factor(I), and the contribution of the labor incomereallocation is greater than the capital factor and quasi-public factor(II). Based on the theoretical research and empirical research, this paper puts forwardpolicy recommendations as follows:(1) Government can be changed by adjustingcapital duty via the initial output elasticity of capital, thereby increasing the share ofthe labor factor income in the primary distribution.(2) Increase the proportion ofdirect taxes in the tax structure in order to give full play to the regulatory role of directtaxes in factor income distribution.(3) Make full use of foreign capital to bringpositive spillover effects while avoiding unfair competition and factor incomedistribution relative distortions caused due to the preferential tax policies.(4) Reduceadministrative monopoly will help to increase the proportion of labor remunerationfactor equitable income distribution.(5) Chinese direct taxes in reducing inequalityneed to be strengthened.(6) From the perspective of adjusting factor incomedistribution, government needs to introduce such Monopoly Regulation Fund,Pollution Tax, Social Security Tax, Monopoly Profits Tax and other taxes in order toraise the overall tax on the regulatory function of factor income distribution.