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Widening income gap woes grow
(Xinhua)
Updated: 2005-07-11 08:50

The widening income gap was the most serious social problem in China last year according to a survey by the Party School of the Communist Party of China Central Committee.

The survey also found income distribution system reform this year is the top concern of respondents, including officials at the provincial level.

"Irrational income distribution is the main cause of the widening gap between the rich and the poor," said Peng Zhao, a member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference.

The ratio of the average annual disposable income between rural and urban citizens stood at 1:3.23 last year, compared with 1:2.57 in 1985.

Rural residents with a low income, or 865 yuan (US$104) per person a year, number 90 million or 10 percent of the country's total rural population.

An Qiyuan, another CPPCC member, said the income gap between different sectors is also wide. Those working in monopolized industries, such as power, water and gas supply units, telecommunications, air and railway transport, enjoy much higher salaries than those working in other industries.

The income gap between poorly-paid and highly-paid industries increased 4.25 times last year, against 3.98 times in 2003 and 2.62 times in 2000.

Many called for the monopolies to be broken up with the hope of narrowing the income gap.

Meanwhile, Peng called for improvement of the personal income tax collection system.

It was reported that 80 percent of personal income tax was from salary earners.

Tax evasion is common among wealthy people. It is difficult for tax collection departments to control and identify the income of the rich because of their diversified sources of income.

The two CPPCC members proposed to improve tax collection and adjust the minimum amount of personal income to be exempt from taxation.

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