In this paper, we construct an incometransfer model in the framework of general equilibrium theory, which includes two regions and four generations. We use this model to analyze the income-transfer policy made by the government to improve the regional inequity. We analyze the influence of income-transfer policy on the amount of the labor, wage, consumptions, income of retirees, gross output and family welfare. The paper also simulates the change of economic indices in eastern and western regions in two regional gap scenarios.