The Effect Of Consumption Tax Regulation On Income Distribution Among Residents In China

The National Financial Work Conference held at the end of December 2017 has set the tune for the reform of the taxation system in 2018: to deepen the reform of the taxation system and form a taxation system that is uniform in tax law,fair in taxation,and regulated.Therefore,it is imperative to speed up the improvement of the tax legal system framework in 2018.With the increase of the Change from Business Tax to Value-Added Tax,the consumption tax will also become the focus of the new round of tax reform.The unclear function of the current consumption tax makes the consumption tax be unable to do its job,and it does not fully play the role of promoting social fairness and narrowing the income gap.Therefore,it is of great significance to study the distribution effects of consumption tax.Thus,based on the relevant data from 2000 to 2012,this paper analyzes the China's domestic consumption taxes' distribution effect.The main contents include the following parts:First,use the Gini coefficient to measure the adjustment effect of China's current consumption tax on residents' income gap.Use the regression formula to calculate the Gini coefficient before and after the tax.Then,the change of gini coefficient is used to measure China's domestic The Effect of Consumption Tax on Residents' Income Gap.The calculation results show that,as a whole,levy of consumption tax will bring negative effects of income distribution,but its progressiveness is also gradually emerging.Secondly,build an ELES model,using the "per capita consumption expenditure" of the eight major categories of commodities from seven urban income levels from 2000 to 2012 as an explanatory variable,and use seven income levels for urban residents in each year of “disposable income per capita” as an explanatory variable.Analyze the comsumption tax imposed on which commodities will have a positive effect on adjusting the income gap of residents.The empirical results show that increasing the consumption tax rate on residential,transportation and communication,miscellaneous commodities and service commodities is conducive to adjusting the income distribution gap of residents.The consumption tax reform needs to be adjusted to increase or decrease in the scope of taxation.Thirdly,based on the empirical analysis of the previous article,combined with the macro and micro environment of China's consumption tax reform,and drawing on the advanced experience of foreign consumption tax reform,we propose policy recommendations for further expending the functions of the distribution of income tax revenue.This article believes that the function of levying consumption tax to regulate income distribution needs to re-orientate the functional purpose of consumption tax to make its target clear;further broaden the scope of taxation,incorporate luxury goods,high-end consumer behavior,etc.;and scientifically modulate the consumption tax rate to be associated with the Environmental Protection tax and Resource tax;the taxation link will be shifted backwards,the tax inclusive price will be changed to tax exclusive price,which will be more transparent and improve the collection efficiency;and rationally set the income sharing mechanism of the consumption tax.