This article analyzes the factor income distribution of the service industry in China and the United States by using OECD input output database. The results show that the value added rate of China’s service industry and its subdivided industries is low, there exist poor quality and efficiency in the overall development and this phenomenon is getting worse. The service industry has poor ability to transform its total output into national income, less available for distribution of elements of economic surplus, and it cannot grow wealth as rapid as making a cake. The primary distribution of national income generated by China’s service industry is in serious imbalance, for example, that profit erodes wage and government intervenes service primary distribution too much results in the formation of the dumbbell distribution structure in which capitalists are too rich, the government is well paid, and workers are too poor. The government and capitalists replace workers to become the primary receivers of income distribution, what’s more, the income distribution imbalance of producer services is more serious than that of life services, and the cake about service industry interest has not been cut well, which has a further condensation and path dependence This abnormal primary distribution in the service industry brings lower consumption rate and the ineffective supply, and indirectly results in the false height of the intermediate demand rate, and also affects the equilibrium relationship between consumption and investment.