On Influence Of Individual Income Tax On Adjustment Of Urban-rural Income Distribution

In recent years, with the reform of China’s economic system, China is enjoying asound and rapid momentum of growth, contributing to the overall development ofsociety and lifting our status in the worldwide industry while arousing change of interestallocation mechanism at the same time. As a corollary to this, there is a significantchange emerged, such as the distribution pattern of national income and income gap.Providing economic growth can ensure the majority’s benefits, it can become asustainable process. So, we must attach much more importance to the distribution of thefruits of economic growth in pursuit of the high-speed.Based on the formal studies, this paper focuses on analyzing the main factorsinfluencing the income gap between the residents in urban and rural areas and verifiesthe effectiveness of those factors. The recent urbanization development means growingurban-rural income gap, thus effects the stability of our country. This contradiction isunavoidable with the increasing development of the society and economy. Therefore,urban-rural distribution system construction should follow this rule during differentperiods comprehensively. At the same time, our pubic policy is confronted with a lot ofproblems, such as the unbalance of fairness and efficiency, unbalance of economic andsocial development, unbalance of urban and rural areas overall development, and theunbalance of the advantaged and the disadvantaged. Those problems can be solved onlywhen we regard the people-oriented policy as the core value orientation, adopts strongmeasures by giving equal stress on efficiency and fairness while paying more attentionto fairness instead of giving priority to efficiency with due consideration to fairness, sothat we can win long-term development of economy and society and actually go offconstruction of harmonious society.Compared with other countries, this paper proves that the urban-rural income gapis still serious by further analyzing the residents income situation. What’s more, thispaper analyzes the regulatory role of individual income tax on income distribution gapamong Chinese residents by calculating urban-rural residents’ per capita disposableincome, per capita rate and setting up econometric model. Through the analysis, itdraws a conclusion that the individual income tax has played a certain role in incomedistribution gap even our country income distribution gap is still increasing at present.In the end, considering our national conditions, the paper concludes that tax can beswinged, especially for the rich, and the low income group’s disposable income can beincreased by collecting individual income tax. It’s not only beneficial to narrow incomedistribution gap, but also beneficial to build a harmonious society.