An Empirical Study On The Impact Of Personal Income Tax On The Income Disparity Of Regional Residents

In order to explore the path of system optimization for improving the regional equity of individual income tax and optimizing the pattern of income distribution among residents,this paper takes the differential adjustment effect of individual income tax on regional income disparity among residents as the research theme.Firstly,based on income distribution theory and tax equity theory,this paper summarizes the ways in which the individual income tax system participates in the distribution of residents’ income,and explores the impact of the "one-size-fits-all" individual income tax system on China’s regional income disparity based on the current situation of regional residents’ income disparity and the imbalance of regional economic development.Secondly,based on the Dagum Gini coefficient,this paper measures and analyzes the spatial and temporal trends of the Gini coefficient of residents’ income at the local and municipal levels in China,and conducts a discriminatory analysis of the distribution of residents’ income with the help of residents’ income levels,so as to find out the regional differences in the disparity of residents’ income in China as a whole.Further,based on the panel data of 235 major cities in China from 2010 to 2020,the non-linear mechanism of the personal income tax in regulating the regional income disparity in China is tested by introducing regional differences in economic development levels through the threshold effect.Finally,from the perspective of spatial heterogeneity,the differences in the impact of personal income tax on the income disparity among residents of the three major economic regions in China are empirically examined to explore the root causes of regional differences in the redistributive effect of personal income tax on residents’ income in China.The following conclusions are drawn from the study: Firstly,the time series evolution of China’s regional income disparity shows an overall decrease,and there are obvious regional differences in terms of spatial distribution: "the central region is the largest,the western region is the second largest and the eastern region is the smallest".Among them,the Gini coefficient of residents’ income in the eastern region is always lower than the national average;the Gini coefficient of residents’ income in the central and western regions is generally higher than the national average,and the reduction of the Gini coefficient of residents’ income in the central region is lower than that in the western region.In addition,combined with the results of the discriminant analysis of China’s residents’ income distribution,it can be found that: under the effect of the two aspects of larger disparity in residents’ income and the overall low level of residents’ income,the residents’ income distribution in the central and western regions is more unreasonable.Secondly,by introducing regional economic development level differences through the panel threshold model,it is found that the adjustment effect of personal income tax on residents’ income disparity shows significant non-linear threshold characteristics as the overall economic development level of the region rises.In cities at a low level of economic development,the imposition of personal income tax will continue to widen the income gap between residents.As the level of economic development rises and even exceeds a certain threshold,the effect of personal income tax on regulating the income disparity of residents will gradually emerge.Thirdly,there is also a certain degree of regional heterogeneity in the effect of personal income tax on regulating the income disparity of residents.Specifically,in the three major economic regions,personal income tax has a non-linear effect on the income disparity of residents;however,compared to the eastern region where the distribution of residents’ income is more reasonable,the advantage of personal income tax in reducing the income disparity of residents is more obvious for some economically developed cities in the central and western regions.Based on the above,the following countermeasures are proposed to optimize the regulating role of personal income tax and improve the income distribution pattern of residents: firstly,design the personal income tax system in a differentiated manner and strengthen the regulating function of taxation;secondly,gradually improve the personal income tax collection and administration system and enhance the efficiency of tax collection and administration;thirdly,increase residents’ income through multiple channels and safeguard the material basis of taxation.