LIU Baihui, KOU Enhui:Redistributive Effect of Taxes and Public Transfers on Urban Residents in China

Abstract  Using UL decomposition method and 2002-2009 urban household survey data, this paper leads a comprehensive analysis on the impacts of taxes and public transfers on income redistribution.The empirical results show that government's net transfer improves urban household's increasing market income inequality, and the improvement effect increases with time.Both transfer payments and tax play a positive adjusting role, among which transfer's contribution is relatively larger which is mainly reflected in the improvement of horizontal equality, while tax's effect is mainly reflected in vertical equality.The redistributive effect of net transfer in each region is weak, and tax policy plays the main role in eastern region, while transfer policy in the western.In the spending of resident to government, endowment insurance and medical insurance expand income gap, and income tax and housing fund reduce inequality on the contrary.In the transfer of government to resident, endowment insurance, social relief and unemployment insurance reduce inequality, even though the last two items' effects are very weak.In contrast, housing fund expands income gap.The conclusions reached in this paper will supply reference to the refinement of income distribution reform plan, promoting tax reform, and improving the social security system.

Key words： Fiscal Revenue and Expenditure    Income Redistribution    Vertical Equality    Horizontal Equality

Source: Finance & Trade Economics , No.9, 2014