Coordination of Income Distribution System and Promotion of Common Prosperity Path

This paper aims at summarizing the evolutionary law of income distribution system and providing a reference for the coordination arrangement of primary distribution, redistribution and third distribution policies. Based on policies, this paper refines the evolutionary law of income distribution and estimates the proportional relationship among primary distribution, redistribution and third distribution by using the national income data. Its new insight lies in abstracting the evolutionary logic of the income distribution system shifting from emphasizing efficiency to prioritizing equity and estimating the proportional relationship among the primary distribution, redistribution and third distribution. The study found that China’s income distribution system follows the evolutionary logic of shifting from efficiency to equity. In addition, China has overcome egalitarianism, given priority to efficiency with due consideration to equity, and placed more emphasis on equity while balancing the relationship between equity and efficiency, promoting the four stages of common prosperity. Primary distribution, the dominant mechanism for income distribution, is required to provide an equitable distribution order. Redistribution, an important means of income distribution, needs to increase expenditures on people’s living and social security. Third distribution, a useful supplement to income distribution, needs to design a policy system for incentive compatibility. This paper provides policy references for promoting common prosperity and conducting fundamental institutional arrangements for primary distribution, redistribution and third distribution.