Research On Fiscal And Tax Policy Of Adjusting The Income Distribution Gap Between Urban And Rural Residents In China

Since the reform and opening up, with the gradual deepening of China’s economic system reform, economy has maintained a sustained and rapid growth, at the same time, in terms of income distribution, highly egalitarian distribution of traditional planned economy period was broken, competition mechanism under the condition of market economy was introduced, resident income distribution gap is widening. The income gap between urban and rural residents is the overall income gap between China’s residents biggest contributor, it is the most important income gap in our country. Modest expansion of the income gap can play the role of encourage economic agents, improving the efficiency of economic operation, but the income gap too large will cause social unrest, affect the stability of reform and opening up. This will require further handling well the relationship between income distribution, seeking to balance fairness and efficiency. Fiscal and tax policy is one of the important means that governments use to control income gap between urban and rural residents. Therefore, we should recognize that the income gap between urban and rural areas is bound to exist, under the premise, analyze the current fiscal and tax policy affect to the income gap between urban and rural areas, and on this basis to explore the appropriate fiscal and tax policy to narrow the income distribution gap between urban and rural.This paper first introduces the current situation of income distribution in our country. Secondly, from income gap, consumption difference, wealth gap three respects describes the present situation of income gap between urban and rural residents is too large, and analyze the reasons for income gap between urban and rural areas, pointed out that the negative impact of income gap between urban and rural areas. Thirdly, by constructing econometric models to analyze the level of fiscal expenditure and the structure of financial expenditure and the level of tax revenues and tax structure influence on income gap between urban and rural areas, on the basis to identify the financial reasons for the expansion of income gap between urban and rural. Finally, according to the actual situation in our country, put forward to fiscal and tax policy recommendations to narrow the income distribution gap between urban and rural, including increase financial support for agriculture, optimize the structure of financial support for agriculture, increase investment in education, improve the system of social security, reduce administrative expenses, as well as the building of a tax regulation system that individual income tax as the main body and other tax coordination.