Study On The Adjustment Effect Of Redistribution On Income Gap

Over the past 40 years of reform and opening up,China's economic aggregate has continuously surpassed new heights,and people's lives have achieved several major historical leapfrogs from poverty eradication,the settlement of food and clothing,and the realization of a well-to-do society.However,with the creation and accumulation of social wealth,the income gap between residents is gradually expanding.The distribution pattern of income in our country is clearly unfair,and the Gini coefficient has gradually expanded from 0.16 before reform and opening up to 0.491 in 2008,and it is still fluctuating at high levels.In the 19 th Party's report,it was first proposed that the major social contradictions in our country have been transformed into the contradiction between the people's ever-growing needs for a better life and unbalanced and uneven development.The widening income gap,uncoordinated development in urban and rural areas,and unbalanced regional development are all manifestations of unbalanced development,which seriously impede China's goal of achieving common prosperity and building a well-off society.This is also a problem that needs to be addressed at this stage.The expansion of the residents' income gap is not only the result of factor allocation,but also the insufficiency of the government's financial redistribution function.The primary distribution focuses on efficiency and redistribution focuses on fairness.Because the initial endowments owned by residents are different,such as land and capital,the initial distribution will inevitably bring about the income gap of residents.Redistribution is the way the government realizes income adjustment by high-income classes and taxpayers,and financial transfers to low-income groups,and to realize the relative fairness of income distribution between high-income and low-income people to narrow the income gap of residents.The adjustment effect of tax revenue and government welfare expenditures on income gap is very important to reduce the income gap of residents,and it is also the focus of this study.Based on a comprehensive overview of the theories and status quo of redistribution and income gap,this article analyzes the adjustment mechanism of tax revenue,support expenditure,education expenditure,and social security expenditure on residents' income,and conducts empirical analysis.First,we select the period from 1995 to 2016 when the income gap has changed significantly.Starting from the income redistribution measures such as individual income tax and social security expenditures,we use the principal component analysis to measure the redistribution index and calculate the Taier index of China's income gap.Based on the calculation results,the internal correlation between redistribution index and income gap index is further explored by cointegration analysis,ECM model,Granger causality test,VAR model and VEC model.The research shows that there is a long-term cointegration relationship between redistribution and income gap,and that the redistribution has an adverse adjustment to the income gap,in which personal income tax and social security expenditures have an adverse effect on the income gap,and educational expenditure and agricultural expenditure can narrow the income gap.Then we use panel data model for 31 provinces,between 2007 and 2015,and establish dummy variables in the east,middle,and west regions to study the effect of redistribution's adjustment effect on income gaps in different regions.The research indicates that the same redistribution policy affects the income differently between the regions.The gap plays a positive regulatory role,while in other regions it widens the income gap.Finally,based on the empirical results,it proposes the establishment of a taxation mechanism that accords with the residents' income,the equal enjoyment of the basic social security rights of the residents,to enhance of redistribution's effect,so as to narrow the income gap.