The Study Of The Optimum Transfer Payment Style

As a developing country, China should always center on economic construction unshakablely, especially under the shadow of the financial crisis around the global, China's determination of centering on economic construction don't shake more. Of the state finance, the expenditure for economic construction shows tendency to descend since China adopted the reform and opening-up policy in late 1978, meamwhile the expendituire of social welfare shows tendency to ascend. Exactly this situation is bound to have an effect upon economic health and sustainable development. This thesis uses model to predict the consequences which would happen if the situation above lasted, solves the above consequences in one framework of model and lastly discusses the programs derived from the above model in reality.The thesis analyses problems using the mathematical model of modern economic, which performs scientific reasoning, deeps constantly and studies all the sides of the questions on some hypothesis conditions. That the prupose of low_income groups not only enjoy the social welfare but also supply effective work promoting economic growth, the thesis bases on the welfare of the low_income groups, makes effective labor supply the breakthrough, points out the imperfection of the existing subsistence security system and explores optimum transfer payment style.The conclusions of modles are as follows: in order to motivate the people out of employment to participate work, the government should give allowance to the people deciding to participate work and execute the negative marginal tax rate among the workers whose incomes are lower; in order to motivate the people in employment to work harder, the government should execute the negative income tax. Finally, combing the reality of subsistence security system to improve benefits of low_income groups, this paper especially discuss the negative income tax including the tax rate and the optimum transfer payment style in different earning ranges.