The Effect Of Cigarette Consumption Tax On The Income Disparity Of The Residents In China

Under the background of the gradual widening of the income gap in our country,income distribution is still the main issue at this stage.Based on the current situation,consumption tax is an indispensable measure to reduce the income gap of residents in China.Among all the consumption taxes,the cigarette excise accounts for a relatively large proportion.Therefore,it is a great significance to study the progressiveness of cigarette excise and discuss its impact on the income gap of residents in China.This paper summarizes the research on cigarettes exercise in China on the basis of combing domestic and foreign scholars' calculation methods on progressive taxation indicators and the academic community's research on consumption tax in adjusting income distribution fields,and most domestic scholars have reached the conclusion that both consumption tax and cigarettes exercise are regressive.Next the paper analyzes the mechanism of the effect of cigarettes exercise on the income gap from two aspects,the long-term and the short-term.It shows us that cigarettes excise affects the income gap in the long-term by affecting the health care expenditures of different income groups;and in the short term,cigarettes excise adjusts the income gap by affecting the disposable income of different income groups.In order to analyze the income effects of the former three cigarettes exerciseadjustments in China,this paper uses a fitting of the income distribution function.The results show that all the three adjustments have their own certain irrationalities,which eventually lead to a further expansion of the income gap.For the purpose of measure the impact of cigarettes exercise on the income distribution of residents in China,this paper calculates the progressiveness of cigarettes exercise from 1995 to 2011 by using K index,MT index and tax concentration coefficient.And the paper demonstrates the regressive nature of cigarettes exercise,that is,the cigarettes exercise expands the income gap.Then the paper simulates the increase of cigarettes exercise,and analyzes the impact of higher tax burden on the health care expenditure of different income groups,so as to observe the impact of cigarettes exercise on the income gap in the long run.It turns that a excise tax increase on cigarettes can do better in balancing the income gap.At last,based on the current situation in China and the research from domestic and overseas,and together with the article's analysis results,this paper makes some specific suggestions to improve the policy of tobacco and wine consumption tax: First,raise the tax rate of cigarettes exercise,and increase the average tax rate to more than 70% gradually;Second,raise the tax rate from the amount of quota,at least the quantity tax should be raised from 0.1 to 1 yuan per package;Third,increase the level of cigarettes exercise rate,and impose the luxury tax on luxurycigarettes.