Distribution of Income.docx
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DistributionofIncome
DiscussionofChina'sIncomeDistributionSystem
Course:
Economicsofthepublicsector
XiaochenTu
1.Summary
1.1China'scurrentsystemofincomedistribution
Thebasiceconomiccharacteristicofthesocialistsocietyisthepublicownershipofmeansofproduction,"todoeverything,accordingtowork"istheidealmodelforthedistributionofsocio-economicsystemofsocialism.However,mostofthesocialistcountriesintheworldcomefrompoorcountrieswhichproducealowerlevelofproductivity,themajorityofsocialistcountriesdidnottaketheaccumulationofthecapitalistproduction,theydidnotreachtheproductivitylevelofdevelopmenttomeetMarxdepictedsocialistsociety,sothemodel"todoeverythingaccordingtowork"donothavethesocialbasisforitseffectiveimplementation.
Sincethefoundingofthedistributionsystem,Chinaembarkedoneconomicreforms,confirmedthatChinaisstillintheprimarystageofsocialism,establishingasocialistmarketeconomyasthebasicdirectionofChina'seconomicreform,recognitionofnationalconditionsandthebackgroundoftherealityofdiversifiedeconomicelementscoexist.The16thCPCNationalCongressclearlypointedoutthat:
“toestablishtheprincipleoflabor,capital,technology,andmanagementofproductionfactorssuchasdistributionaccordingtocontribution,improvethedistributionaccordingtoworkasthemaindistributionsystemavarietyofmodesofdistributioncoexist.Insistongivingprioritytoefficiencywithdueconsiderationtofairness,itisnecessarytopromotethespiritofdedication,earnestlyimplementingthedistributionpolicy,itisnecessarytoopposeegalitarianism,butalsotopreventtheincomedisparitybetweentheobjectiveofcommonprosperity,andexpandtheproportionofmiddle-income,improvetheincomeoflow-incomelevel.”
Atthesametimetospeeduptheprocessofmarketizationofthenationaleconomy,tocontinuetopromotethemarketofcapital,labor,technology,managementandotherfactorsofproduction,promotethefactorpriceformationmechanism.Thus,wecandeeplyfeelthepaceanddirectionofeconomicreformofdistributionsystemintheconstructionprocessofChina'ssocialistmarketeconomicsystem,,clearthatatthisstage,Chinahasestablishedthesystemthat"thedistributionaccordingtoworkandtheallocationofthecontributionofthefactorsofproductioncombine"asthedistributionsystemofthecurrentChinesesociety.
1.1Mainpointsoftheincomedistributionsystem
Firstly,foundtheguidingideologyofthefirstmoneytothecommonprosperity.Adheretothesocialistroad,followthedistributionaccordingtowork,anditsfundamentalpurposeistobreakthe"ironricebowl"ofegalitarianism,makethepeopletoliveaprosperousandhappylife.Onthebasisofsumminguphistoricalexperience,DengXiaopingbelievedthattheachievementofthisobjectivecanonlybeastepbystepfromparttowhole,andultimatelyachievecommonprosperity.Allowsomeofthepeoplethroughtheirownhardwork,legitimatebusiness,andgivefullplaytotheirwisdomtoachievethefirstrich,itisreasonabletorecognizethedifferencebetweenincomes.Itreflectsthefairbetter.
Secondly,putthedistributionaccordingtoworkanddistributionaccordingtoproductionfactorstogether.Itnotonlyclarifiedthelong-standingunclearcontroversyinthedistributiontheory,butalsopointedoutthedirectiontofurtherimprovetheallocationanddistribution.Intheory,therearetwobasicfactorsdeterminethesizeofpersonalincome:
first,thephysicalelementsofindividualsaboutcapital,land,plantandotherfactorsofproduction;secondhumanelements,mainlyreferstothequalityandcapacityofindividuals.Inadditiontodependingonthegeneticandothercongenitalfactors,toagreaterextentitdependsontheacquiredinvestmentineducationandtheirownefforts.
Thirdly,adheretotheprincipleoffairnessandefficiency.Thatistosay,toimproveefficiencyisthewaythatmakespartoftheregion,partoftheunittogetrichfirst.Insistongivingprioritytoefficiencyistoadheretothepriorityofdevelopmentofproductiveforces.Adheretotheprincipleoffairnessistomakesurethatallthepeoplecouldenjoythefruitsofdevelopmentofproductiveforcesandeconomicgrowth.Thisisthefundamentalrequirementtoachievecommonprosperitygoals.Theincomelevelmaybevariablewitheconomicgrowth,butwemustalsomakesurethattheincomeandlivingstandardsoflowincomepeopleincreaseandimprovealongwitheconomicgrowth,too.
Fourthly,banningillegalincome.InChina's15thCPCNationalCongressreport,itclearlydefinedthat,strictlybanillegalincome,theactionofmisappropriationofpublicproperty,taxevasionandotherillegalmeanstoseekprofitwouldberesolutelypunishedaccordingtolaw,rectifyunreasonableincome,thebehaviorsthatusevirtueoftrademonopoliesandcertainspecialconditionstoobtainadditionalpersonalincomemustbecorrected.
2.Thereformprocessoftheprinciplesofincomedistribution
Inthepracticeof30yearsofChinesereformandopening-up,thefocusonmutualtrade-offsbetweenfairnessandefficiencyofincomedistributionhasneverbeeninterrupted,anditsreformcharacterizedbyfairnessandefficiencyinthedifferentstagesofeconomicdevelopment,alsoattractedbyvaryingdegreesoffocus.Theincomedistributionreformprocesshasexperiencedseveralperiodsafteropeningup.
Thefirstperiod(1978-1984):
“Overcomethetendencyofegalitarianism,inordertoimprovetheeconomicefficiency”.Atthebeginningofreformandopeningup,thegapbetweenChina'seconomyandtheworld'sdevelopedeconomiesisbig,therequirementtoimproveeconomicefficiency,andnarrowthedevelopmentgapisveryurgent.Andthereforedecision-makersturnedtoimproveeconomicefficiency,andmaderemarkableachievements.Factshaveprovedthatbeforethereformandopeninguptheegalitariandistributiongreatlyinhibittheefficiencyofspace,butalsoshowednorealsenseoffair.Thisdistributionhasledtothedoublelossofequityandefficiency.Afterthereformandopeningup,China'stopdecision-makersrealizedthateconomicefficiencyisanecessarywayofeconomicandsocialdevelopment.
Thesecondperiod(1984-1992):
“Efficiencyfirst,fairnesssecond”.Atthisstage,theemergingsocialcontradictionsaskedtheGovernmenttoprovideadegreeofattentiontothefair,communityfairappealshouldbetakenseriously.Intheallocationofdecision-making,givingprioritytoefficiencythanthefairreallysolvedtheproblemofshort-term,butplantedahiddendangerforlong-termsustainabilityoftheeconomicandsocial.Whenthedevelopmentlevelofeconomicislow,equitablesubordinationisconducivetofocusoneconomicdevelopment,toimproveeconomicefficiency,buttheresultingsocialdistortionswouldincreasethesubsequentcorrectioncosts.
Thethirdperiod(1993-2006):
“givingprioritytoefficiencywithdueconsiderationtofairness”.Inordertomeettheneedsofeconomicandsocialdevelopment,inthe14thCPCCentralCommitteedecisionontheestablishmentofasocialistmarketeconomicsystem,itproposedtheallocatedprincipleof"givingprioritytoefficiencywithdueconsiderationtofairness",andgetthefullrecognitionanddemonstrationintheoreticalcircles.
Indeed,"givingprioritytoefficiencywithdueconsiderationtofairness"principleprovidesapremisefortheaccumulationofsocialwealthandimprovingpeople'slives.However,becauseoftheprincipleisfocusingonefficiency,theincreasinglyseriousproblemoftheunevendistributionofincomeandawideningwealthgapproblemhappenedintheactualeconomiclife.Since1994,China'sGinicoefficienthasalwaysbeenmaintainedatlevelsabove014,andthereisanincreasingtrend.
Thefourthperiod(2006-now):
"Initialdistributionandredistributionarenecessarytoproperlyhandletherelationshipofefficiencyandequity;inredistributionweshouldpaymoreattentiontofairness.”Accordingtotheviewsofthecommunity,theSixteenthCPCCentralCommitteegaveuptheformulationof"givingprioritytoefficiencywithdueconsiderationtofairness",stressedtheneedtopaymoreattentiontosocialequityonthebasisofeconomicdevelopment.Becauseifweneglectedfairnessintheinitialdistribution,tocorrecttheinjusticeresultsintheredistributionareworthless.Fromthecurrentsituation,theparty'sdocumentsonlyproposedtoproperlyhandletheefficiencyandequityintheinitialdistributionandredistributionperiod.Abouthowtounderstandandsolvethecombinedrelationshipbetweenfairnessandefficiencyinthenewsituation,westillneedthetheoreticalcommunitytomaketheactualresearch.
3.Theanalysisonnationalincomedistribution
3.1Thedistributionpatterns
Thedistributionofnationalincomemeanstheallocationbetweenthevariouseconomicentitiesofacountryineconomicactivityduringagivenperiodinbroad;thenarrowsensereferstotheallocationprocessofthenationalincomeinthenationaleconomy,theproductionunitsandproductionunitsaswellasresidents.InthecaseofChina,itincludesthethreeprocessesoftheinitialdistribution,redistributionandfinaldistribution.
Inthissection,weanalyzetheprocessofformationatthepresentstageofnationalincomedistribution.Inordertoin-depthanalysisofthesereasons,weshouldtakecarefullystudyoftheincomedistributionprocess.
(1)Theprocessofformationingovernment'sfinalincomedistributionpattern:
Theinitialdistributionoftotalincomeofgovernment=increasedvaluebygovernment+l