Promoting Common Prosperity in Rural Areas through Improving the Mechanism of Redistribution Regulation

Common prosperity is the essential requirement of socialism and the common expectation of the people. The report of the Twentieth National Congress of the Communist Party of China deeply elaborated the Chinese characteristics in five aspects of Chinese path to modernization, proposed that "Chinese path to modernization is the modernization of common prosperity for all people", and included "achieving common prosperity for all people" into the essential requirements of Chinese path to modernization. Since the 18th National Congress of the Communist Party of China, we have completed the historical task of poverty alleviation and building a moderately prosperous society in all respects, and achieved the first centenary goal. On this basis, promoting common prosperity for all people should be placed in a more prominent position. On the one hand, we must firmly grasp the center of economic construction, allowing all sources of creating social wealth to flow fully, and laying a more solid material foundation for distribution; On the other hand, it is necessary to continuously improve the distribution system, build a coordinated and supporting system for initial distribution, redistribution, and third distribution, increase the regulation of taxation, social security, transfer payments, and so on, so that the achievements of modernization construction can benefit all people more and more fairly.

The initial distribution is the foundation, the redistribution is the guarantee, and the third distribution is the supplement. The three are closely related. Among them, the redistribution adjustment mechanism, mainly through taxation, social security, and transfer payments, can play an important role in better solving the problem of income inequality.

The initial allocation is based on the contribution of production factors such as labor, land, capital, and data in the production process, and the market plays a decisive role in resource allocation. Redistribution refers to the government's second distribution of national income after the initial distribution through taxation, social security, and transfer payments, in order to reasonably regulate the distribution relationship between urban and rural areas, regions, and groups, and to regulate the income and wealth gap formed by the initial distribution. By increasing public service fiscal expenditure, increasing the income of low-income groups, expanding the middle-income group, and reducing the expenditure burden on low-income groups, we will promote the formation of an olive shaped distribution structure with a large middle and small two ends. From these perspectives, improving the redistribution system plays an important role in promoting social fairness, justice, and common prosperity.

One is to continuously improve the tax regulation mechanism. Taxation is the main source of national finance and a powerful tool for regulating income distribution. Through horizontal tax system design and vertical tax and fiscal regulation, the income distribution gap among residents can be improved, which has a positive effect on achieving social wealth redistribution. On the one hand, we need to optimize the tax system structure. Based on the current situation where the proportion of direct taxes is relatively low, further improve the direct tax system, reduce the proportion of indirect taxes, gradually achieve a transition from indirect taxes to direct taxes, and better play the important role of tax policies in reducing personal taxes. On the other hand, it is necessary to improve the personal income tax system. Establish a comprehensive and classified personal income tax system, improve the scope and standards of special additional deductions, and optimize the structure of personal income tax rates. At the same time, we need to improve tax collection and management. Expand the scope of comprehensive collection, improve the natural person tax and fee service and regulatory system, improve the taxation of consumption, property, and other aspects, gradually optimize the tax rate setting of consumption tax items. It is recommended to appropriately increase the tax rate or establish differentiated tax rates for goods that have already deviated from the connotation of daily necessities and have obvious luxury attributes. In addition, in terms of tax incentives and fee reductions, it is possible to consider favoring labor-intensive industries and small and micro enterprises, encouraging innovation, reducing operational costs, and better improving employment rates and worker income.

The second is to promote the equalization of basic public services. Social security is an important lever for redistribution and an effective arrangement for ensuring and improving people's livelihoods. It can increase personal disposable income or reduce direct expenditures, effectively enhancing the happiness, sense of gain, and sense of security of the people. We always adhere to putting the people at the center, ensuring and improving people's livelihoods in development, improving the social assistance system, gradually increasing the minimum living guarantee level in urban and rural areas, more effectively securing the basic bottom line of people's livelihoods, and continuously meeting the people's aspirations for a better life. At the same time, it is necessary to better promote the equalization of basic public services in rural areas, strengthen the construction of rural infrastructure and public service systems, improve grassroots public health facilities, and improve the rural living environment. We must adhere to doing our best and acting within our capabilities, with a focus on improving the level of public services; To accurately provide basic public services in areas that people are most concerned about, such as education, healthcare, elderly care, and housing, continuously improve public service standards, optimize the allocation of public service resources, and provide basic public services that are suitable for the level of economic and social development; We should actively guide social funds and forces to enter the field of basic public services, fully mobilize the enthusiasm of all sectors of society, provide multi-level and diversified public services, and promote the formation of a more perfect public service policy and institutional system.

The third is to increase the intensity of transfer payments. The main contradiction in our society has been transformed into a contradiction between the growing needs of the people for a better life and unbalanced and insufficient development. Regional development imbalance and insufficiency are one of the main aspects and an important constraint factor in promoting common prosperity. The report of the 20th National Congress of the Communist Party of China emphasizes the deepening implementation of the regional coordinated development strategy, regional major strategy, main functional area strategy, and new urbanization strategy, optimizing the layout of major productive forces, and building a regional economic layout and land spatial system with complementary advantages and high-quality development. It aims to promote the formation of a new pattern in the western development, achieve new breakthroughs in the comprehensive revitalization of Northeast China, accelerate the rise of the central region, and encourage the eastern region to accelerate modernization. In this regard, fiscal transfer payments are the main policy tool for narrowing regional development gaps, promoting regional financial equalization, and promoting common prosperity. We need to further leverage the regulatory role of transfer payments in promoting regional economic development, continuously optimize the expenditure structure of transfer payments, increase the intensity of transfer payments to local governments, focus on disadvantaged and underdeveloped areas, increase targeted support and assistance efforts, and enhance overall development capabilities and levels; To improve the efficiency of using transfer payment funds, establish a sound transfer payment supervision system, improve the transfer payment performance evaluation system, effectively improve the accuracy of the implementation of transfer payment projects, and improve the efficiency of fund utilization; We need to increase the transfer payment to farmers and rural areas, not only by increasing fiscal expenditure on rural education, medical care, elderly care, social assistance, etc., but also by improving the system design in payment and benefit collection, gradually narrowing the transfer income gap in disposable income between urban and rural areas, different groups in rural areas, and different regions in rural areas.