The Rationalized Understanding And Countermeasures For Our Current Income Distribution System

Before the reform and opening up, China has been insisting on a single distribution system according to work, which also is regarded as one of the basic economy features of socialism. After the reform and opening up, the introduction of elements of production into distribution system indicates that our distribution reform has already hit new areas. The 15th National Party Congress has another major breakthrough in distribution system: through implementing an income distribution system in which distribution according to work is the leading principle and other factors are taken into consideration, and including capital, technology and other economic factors in the distribution of economic rewards, thus proposing a new distribution theory under with Chinese characteristics. The 16th Party Congress report also made it clear: "Deepen the reform of the income distribution system and improve the social security system. Rationalizing the relations of income distribution bears on the immediate interests of the general public and the display of their initiative. We should adjust and standardize the relations of distribution among the state, enterprises and individuals. We should establish the principle that labor, capital, technology, managerial expertise and other production factors participate in the distribution of income in accordance with their respective contributions, thereby improving the system under which distribution according to work is dominant and a variety of modes of distribution coexist."The implementation of income distribution according to production factors is innovation on the principle of socialistic distribution system. It is not decided by any individual's will, but by the subjective economic conditions during China's initial socialism stage, which is backed up with solid and full theoretical and realistic basis. Distribution by production factors is decided theoretically by value of labor theory and the ownership structure at present stage, is also the objective requirement by propriety of production factors and the socialistic market economy.It has become an unavoidable reality that how to handle the relationship between income distribution according to work and according to production since the beginning of new distribution theory. Many theories have been proposed on how to overcome the mistake in distribution according to production factors, how to determine the value of production factors in the formation of value and what are the criteria to measure their contribution for value. Those theories offered guidelines for improving our current situation but missed the fundamental mistakes in distribution system. Starting from the reasons and basis for distribution according to production factors, this article is to address these issues through analyzing their respective benefits, problems and solutions for these problems how to make them coexist. This article also analyzes the reasons for increasing income gap and its influence on the construction of harmonious society from the perspective of taxation, legislation and harmonious society construction and gives the solutions for preventing the gap. This article also tries best to over the mistakes in distribution according to production factors, to illustrate the relationship between efficiency and fairness, to rationalize income distribution among residents so as to avoid income gap and to locate the strong basis for distribution according to production factors.The establishment and development of income distribution according to production factors is sure to plays positive role in our economy. It will help to improve the adjustment and optimization of ownership structure reform and the establishment and consolidation of the roles and positions of multiple economic sectors in their distribution during socialistic initial stage. This kind of distribution system will help to give market mechanism full play in allocating resources in economy and promote enterprises to optimize their employment of all kinds of production sectors. Also this system will help to enlarge the percentage of middle-income individuals or families so as to make more and more employees reach the well fair or rich levels, which is the goal for comprehensive well fair society and also the unavoidable stage for common prosperity of whole society.