Efforts Called to Stop Income GapRecent statistics seem to show that a growing income gap in China is leading to increased polarization. The problem may not be from distribution of income, however, but from extra money people pocket on the side.Extra income of State employees, including money from part-time jobs, kick-backs and even bribery, are found by economists to contribute a lot to the widening income gap. Because China does not have an income reporting and supervisory system, the influence of such extra money on the widening income gap cannot be accurately counted or effectively controlled. Although market mechanisms have been in place in China for two decades, the State sector has basically defied market rules in the field of distribution because of antiquated concepts. The generally egalitarian reward mechanism is unable to control what really goes on. Some workers might stay in State-owned enterprises because of the benefits in housing and medical services. Some of them work at second or even third jobs to build up their savings. These extra jobs could be obtained using one's expertise and, in some cases, power at hand. How to regulate and control these under-the-table incomes will have an important impact on the arduous anti-corruption campaign. To resolve this problem, the distribution system in government organizations and State-owned enterprises should be straightened out. People should be rewarded according to their capabilities and the work they do. The deepening of economic and administrative reforms will play a significant role in shaping a fair distribution system in the State sector. A public income reporting system should also be instituted as soon as possible. Urban residents should report all their income annually. Supervisory organizations should check on people's extra income by looking into their personal assets, consumption, stock investments and bank savings. An inheritance tax should be levied to aid in the healthy redistribution of personal assets. |
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