Abstract: Government, companies, and citizens are the three main players in the existing pattern of income distribution. Government predominates the existing pattern inChina. It takes large share of revenue and leaves a small share to companies and citizens, who are under a high tax burden. With more attention being paid to people’s wellbeing, the existing pattern should gradually be adjusted. The government should reduce and keep its revenue share stable to fulfill its administrative functions. Meanwhile, the shares of companies and citizens should be increased to reduce their economic burden. The legitimacy, fairness and justice of three players in the income distribution pattern should be assured to promote economic and social development. In addition,China should study international practice to revolutionize the relationship between taxes and administrative fees. Administrative fees and other non-tax revenue should gradually be abolished, so as to have tax as the predominate means of income distribution. The non-tax burden on companies and citizens should progressively be decreased. Correspondingly, the rationalization of income distribution and social fairness should be judged by the macro tax burden and the relationship between collection and spending.
Keywords: Taxation reform, Income distribution, Fairness and justice
Source: China Finance and Economic Review, Volume 2, No.2, 2013