Research Of The Redistributive Effect And Improvement Of The Redistribution System In China

Over the past decade,the Gini Coefficient of China far exceed the international warning line by remains high above 0.46,and the negative effects to economic and stable social development are increasingly prominent.The government corrects the results of market primary distribution of income by the social security system and personal income tax system as main means.This paper explore the effect of adjusting the redistribution system based on deficiencies investigate the presence of redistribution system,and try to put forward policy recommendations for improvement.Based on the survey data of annual income of urban residents from 2002 to 2014 in Tianjin,this paper estimated the regulating effect of Chinese income redistribution system using UL decomposition model.The results showed that Chinese overall redistributive effect adjustment to achieve 25%-35%,with serious effect loss.The effect of loss hovered around 20% before 2013,mainly from reranking effect,but the last two years the level of effect loss significantly increased,at the same time horizontal effect increased.Take 2014 as an example,redistribution effect could reach178% of actual effect without the horizontal effect loss and reranking effect loss.The redistribution effect of social security income of residents was maintained at25%,becoming the main source of regulation.While enhanced,the proportion of horizontal effect was small in loss.Reranking effect was the main aspect of the loss,but gradually decreased.The reranking effect of social security expenditure was obvious,however played a weak role in widening the gap due to the small scale.The redistribution of personal income tax was less than 0.4% using the survey data,and reranking was the main aspects of effect loss.The redistribution of income tax had an average increase of 0.51 percentage points by using the simulation calculation.Considering the impact of effect loss,an increase of 0.3 percentage points was more practical.When the personal income tax was decomposed according to taxation elements,the tax rate structure and the exemption amount both produced positive effect,and the latter accounting for 266.35% of the overall tax effect as a leading role.The loss of redistribution effect was caused by pre-tax deduction and tax erosion,and the effect loss of tax erosion was so serious that reached 123.90%.The redistribution system could be improved from many areas.In the aspect ofthe social security system,social relief and social welfare should be increase financial input appropriately because of obvious progressive;the pension or retirement fund system should be reformed for reducing horizontal and reranking effect loss.In the aspect of personal income tax,the standard of expense deduction should be more rationalization;improvement of tax collection and management was designed to reduce tax erosion.The most fundamental is to accelerate economic development and raise people`s standard of living in order to enhance the effect of redistribution.