Distribution of Income.docx

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