Rectifying Income Redistribution in China: Homogenising Public Service Provision or Tax Regulation?
Journal of Chinese Tax and Policy, Vol. 3, Special, pp. 37- 58, May 2013
32 Pages Posted: 30 Nov 2014
Date Written: May 30, 2013
Abstract
Currently the labour income ratio in China is normal relative to its economic development; the income differential between industries requires solutions from the continuing establishment of a market economic system and the reduction of monopolistic practices. The important income redistribution issues that require public finance mechanisms are geographic differences and urban/rural differences. Both theory and practice have evidenced that using tax mechanisms to adjust income distribution is ineffective. The most effective path to solve the issue of unequal income distribution is to gradually implement public service provision homogenisation. Further, through political means, changing the factors of production flow asymmetry arising from economic globalisation will also play an important role.
Undoubtedly unequal income distribution is the issue that receives the most attention in China today. This paper proposes new ideas for research consideration, in relation to the reasons of and rectification solutions to the unequal income distribution in China.
Keywords: Income Redistribution, Public Service, Tax Regulation, Factors of Production Flow
JEL Classification: H2, K34, H3
Suggested Citation: Suggested Citation