The Effect Of Turnover Tax On Chinese Urban Income

At present, there is an indisputable fact that there is a huge income distribution gap in China. The income gap among urban residents has been mading the income distribution research more complex, and rural income gap, rural-urban income gap as well. For the past few years, there is one research draw a conclusion that the contribution of the urban Gini ratio to the national Gini ratio is growing year by year. According to this trend, the contribution of the urban Gini ratio to the national Gini ratio will go on along with the process of urbanization. Since the reform and opening up, China's dual economic structure obviously affects the urban residents. Compared to rural residents, urban residents have no land-use rights, that element into only two factors of production, capital and labor. So the income gap has a pernicious influence on urban residents. With the turnover tax as the mainstay of Chinese tax structure and it's regressive, it will make a far-reaching impact on urban residents. Study on the effect of turnover tax on the distribution of urban income is of importance. To improve the effect of turnover tax on the distribution of income, at first, we must analyze the real effect of turnover tax on urban income and find the cause of the effect. Then we will make recommendations for the caution, so as to build harmonious distribution.The main contents and viewpointsThe first chapter is the Introduction. This chapter is to introduce the meaning and purpose of the subjects, related research and summary comments, the scope of research, logic structure and research methods.The second chapter is an overview of the theory. In order to nail down the research directions and results, we first define controversial concepts, such as equity, equality, the income gap and so on. Then, this chapter analyzes the impact and impaction measure of the turnover tax on urban income distribution. Turnover tax, mainly affect unban income distribution through affecting personal disposable income. Meanwhile, the turnover tax can also affect the tax burden on enterprise to affect income distribution indirectly. In accordance with "social welfare function" and the overall-tax-shifting characteristics of Chinese turnover tax, the tax in the spending is the loss of social welfare of urban residents. The third chapter is an analysis of the effect of the turnover tax on the urban income distribution. In this chapter, by the use of micro-simulation method and the "Chinese cities (towns) Yearbook of the Expenditure and the Price", "Prices, Income and Expenditure of urban residents Survey Statistical Yearbook", this paper reached the following conclusions:the turnover tax plays a negative role on urban income distribution as a whole. Value-added tax plays a negative role, In which both the low-rate-value-added tax and the basic-rate-value-added tax play a negative role of negative regulator, while the sales tax and consumption tax taxes play positive role. Then we find that the low-rate-value-added tax impact dramatically, the basic-rate-value-added tax is the second, and the sales tax and consumption tax taxes have impacted a little.The third chapter is an analysis of the effect of the turnover tax on the urban income distribution. In this chapter, by the use of micro-simulation method and the "Chinese cities (towns) Yearbook of the Expenditure and the Price", "Prices, Income and Expenditure of urban residents Survey Statistical Yearbook", this paper reached the following conclusions:the turnover tax plays a negative role on urban income distribution as a whole. Value-added tax plays a negative role, in which both the low-rate-value-added tax and the basic-rate-value-added tax play a negative role of negative regulator, while the sales tax and consumption tax taxes play positive role. Then we find that the low-rate-value-added tax impact dramatically, the basic-rate-value-added tax is the second, and the sales tax and consumption tax taxes have impacted a little. The low-rate-value-added tax has the greatest impact on urban income direction, basic-rate-value-added tax follows, the sales tax and the consumption tax the last.The Chapter IV is the cause of the effects of the turnover tax on urban income. Overall the cause can be grouped into two, the one is the irrational tax structure, the other one is the unreasonable turnover tax regime. Chinese recent tax structure is mainly based on turnover tax, which is not only to deteriorate the gap but also to the disadvantage of the income distribution. While in turnover tax structure, it's unreasonable to tax on the goods of low consumption elasticity for value-added tax. The sales tax is of double taxation, and it limits the scope of value-added tax and consumption tax. The consumption tax is both absence and offside in scope, and it's also unreasonable in ratio structure.The Chapter V is the tax optimization tips. Combining the analysis of the effect and the cause analysis, this chapter proposed the reform of the overall vision: In the long run, we should increase the income tax in the tax structure, in the proportion of income tax equals to turnover tax in the pairs of main tax system. In the short term, you can start from three aspects of reform. First, we should adjust the VAT tax items and tax rates, lower VAT rate of daily necessities. Second, we should phase out the sales tax, eliminating double taxation. Third, expand the scope of the consumption tax and adjust the consumption tax rate structure.The main innovations of this thesis1. Innovating evidenced basisThe previous research of the effect of turnover tax on urban income is limited in theoretical foundation. This paper discussed the theoretical basis for study of welfare loss, and the method to measure the tax burden at the first time. And this paper firstly analyze the fact that turnover tax burden shifts as a whole.2. Innovating empirical methodsChinese current turnover tax research on urban income limited to the description of the tax burden among different income groups. This paper firstly inducts the Gini Ratio as a measure of the stand. This is not only to assess the gap when the result of the description research is not evident, but also measure the degree of the effect of turnover tax on urban income.3. Innovating optimization tipsFor the sporadic and myopic turnover tax policy in the existing research, this paper firstly recommend long-term policies and short-term policy. From the long-term and short-term can not only to form a complete system of policy recommendations, but also covers the short and long term policy recommendations made the policy recommendations more feasible.