Comparison and Countermeasures on the Impact of Income Inequality on Economic Development in China and the United States

This paper analyzes that the effect of income inequality on economic growth in China and the US, summarizing the economic development of the two countries. As the economy grows, income inequality increases. When income inequality increases, it affects several aspects in a variety of ways, including education, the development across regions, the differentiation of consumption power, and social stability. Based on these potential influences, China and the US have similarities and differences. The similarity is that income inequality has a negative impact on consumption and education. The difference is in the political system, which means that there are many factors that lead to differences in the implementation of policies in the true life. Therefore, their respective solutions are also different. This paper focuses on the poverty alleviation policy from China, which has solved the most basic problem of poverty and narrow the gap between the high-income people and the low-income earners. From the perspective of the US, with an experienced and mature tax system, US is able to implement progressive taxation to collect more taxes on high-income people and reduce the pressure on low-income people.