Balanced Budget Destination

The unfairness distribution of income has become the difficult problem which persecutes China currently in terms of social and economic life and which the government should take the unavoidable responsibility for. This paper aims at this problem to study the balancing budget incidence. Theoriotically speaking, the balancing budget incidence is one of the most important aspects for deep digging into redistribution of income. As we know, individuals and houses take the burden of taxes, as the main resource of fiscal revenue, and benefit from the governmental expenditure. And it is exactly the point of the balancing budget incidence to study the net benefit of individuals and houses in terms of both fiscal income and expenditure, and further to evaluate the coordinating effect of fiscal policy on redistribution of income.The paper consists of eight chapters. The first chapter is the introduction, firstly presenting the importance of this research and clarifying the condition of people's incessant pursuit after fairness in a historical frame. The types of fairness views, different insights of fairness and the relationship of fairness and efficiency are focused on herein. Secondly, kinds of existing research products are studied, including introduction to incidence of taxing, incidence of fiscal expenditure and balancing budgeting incidence. Thirdly, this chapter outlines the method and paradigm of this paper and finally introduces the frame, the innovation and the contribution of this paper.Chapter two starts with the study of the relationship between the elementary distribution and the redistribution, followed by the definition of the duty of fiscal income distribution and finally studies the balancing budget incidence of income distribution and redistribution.Chapter three gives the analysis of fiscal revenue incidence. The first sector sketches the system of fiscal revenue, by analyzing non-tax revenue and tax revenue incidence. The second sector analyses the incidence of direct tax, involving its basic paradigm, the effects of various tax rates on individual income tax and the incidence of property tax. As to the incidence of individual income tax, the study develops in such respects as taxing mode, deduct standards, choices of deducing items, tax rates, tax level and spread, and administration of taxing. Additionally, a relevant conclusion of individual income tax is drawn from a specific simulation of real data. On the other hand, the incidence of property tax is studied in terms of the property tax theory and the allocation of residents's wealth, and similarly the experiential analysis is developed by simulating with the real data. The third sector investigates the incidence of indirect tax. In beginning of this part, the fundamental mode is studied in ways of basic research and the incidence of indirect tax is clarified in experiential research with real data. Then, the reasons why China employs indirect tax to redistribute are explained and the incidence of value-added tax and consumption tax is studied.Chapter four focuses on the incidence of fiscal expenditure. The first section analyses the incidence of governmental expenditure by introducing several modes related with the incidence. The second section investigates the part of purchasing expenditure which is closely concerned with income redistribution, such as education expenditure and sanitation expenditure, while the third section maily on the part of transferring expenditure such as social security expenditure and subsidy expenditure. The forth section gives the empirical analysis of the relation between the amount of macro fiscal expenditure and the fairness of society, and compares the internations' education expenditure and sanitation expenditure. Finally, the fifth section consentrates on the relation between fiscal education expenditure and redistribution.Chapter five analyses the incidence of balancing budget. At first, the incidence is outlined in respects of fundamental theory, real simulation and empirical analysis. Secondly, the balancing budget incidence of consumption tax, individual income tax and property tax is studied on grounds of the foregoing chapters. Thirdly, the incidence is deeply dug in such other ways as capitation and proportional tax.Chapter six and seven proceeds not only to balancing budget incidence of the gap between urban and rural areas but also to balancing budget incidence of governmental housing guarantee policy. In the part concerning the former incidence, the paradigms of the urban and rural gap is explained on basis of the theory of public goods benefit and so it is with the representation, the reasons of the gap's expanding and the procedure of the gap. In addition, the gap and the amount of fiscal agricultural expenditure and agricultural tax incidence are studied empirically and the conclusion is reached. When it comes to the housing guarantee policy, the necessities of the interference of government in housing ensure and the standards of intervening are clarified firstly. Moreover, the housing ensuring policy is analysed in terms of the balancing budget incidence.Chapter eight concludes on basis of balancing budget incidence of fiscal policy. Firstly, the foreign experience is used for reference; secondly, incidence of variousness tax incidence is analysed as for taxing policy; as last, on grouds of the previous parts are fiscal revenue policy, expenditure policy, education and sanitation expenditure, agricultural policy and the minimum housing guarantee policy represented.Using the research achievements of other people for reference, this paper study balancing budget incidence specialized, and strives for the breakthroughs on analysis methods and effect of balancing budget incidence on income distribution.These breakthroughs are mainly expressed in the following:1. As for study methods, this paper pays attention to the combination of normative analysis with positive analysis,and lays stress on the positive analysis.The combination of qualitative analysis with quantitaeve analysis, and lays stress on the quantitative analysis,. Especially moulds of income redistribution be applided analysis of direct tax,indirect tax and public expenditure,gives support of system theoretical moulds for this paper.It gives the help for us. This paper also extensively uses the comparative analysis ,including horizontal analysis and longitudinal analysis. Through comparative study,this paper seeks the practices of balancing budget incidence on foreign which are of benefit for our country for reference.2. The conclusion of this paper illustrates that various factors contribute the the expanding of China's income gap. In the view of public finance, any measure to gain fiscal revenue and to expend, and even combination can have an effect on individuals' and houses' income distribution, thus the influence on the income distribution of individuals and houses should be examined in terms of not only the fiscal revenue and expenditure but also the balancing budget incidence, to assess the net benefit brought by the incidence of balancing budget.According to the analysis of tax incidence, under the circumstance of progressive taxation, the effect of tax rate on tax incidence and redistribution should be estimated in accordance to individual income amount. As for the contemporary level of income, the tax burden on mid-class income individuals is comparatively heavy when the individuals are imposed to the tax rate 20% after an deduct of an certain amount, heavier than that when they imposed to the progressive taxation, yet the former system indeed does good to fairness of society. Thus, in the view of Geni Coefficency, an overall increase of the deduct standard of individual income tax, changing from 800 RMB to 1600 RMB in 2005, does harm to fairness of society, in that the more the income of an individual, the more the deduct of his/her tax. In order to reverse the situation, the measure to decrease the deduct standards of high-income individuals should be considered. Similarly as to the items of deduct, if the item is calculated according to an proportion of income, the result is also benefitial to the high-income class but hazardous to fairness of society. As for the property tax, the imposing cost and difficulty should be taken into account. This paper holds the view that the levy of house property tax can be improved and in consideration of China's situation, it is inappropriate to impose legacy tax and bestow tax. The analysis suggests that consumption tax on the goods with an income elasticity exceeding 1 will aggravate the burden on high-income class. So as to reinforce fairness of society, the scale of consumption tax should be broadened, especially to impose on the luxuries of which the income elasticity exceeds 1 with little impact on effiency.The research of incidence of fiscal expenditure suggests the public finance be strengthened and the transfer be enlarged, to transform from the "feeding-oneself finance" to the public finance. The central government should enhance fiscal transfer to provincial government, to improve the transfer institution and to extablish a transparent transfer institution combined with the enactment of the transfer act. In addition, the structure of education expenditure should be rebuild, to transfer our payment from non-compulsory education to compulsory education gradually and from urban education to rural education to some extent. This paper figures out that the overall expenditure to compulsory education should be increased and the administration should be leveled up. Only by doing so, more education can be available for citizens in order to reinforce the competition of society,In order to reduce unemployment, the unemployment benefit and employment inforcement should be combined. This paper suggests the pure fiscal benefit should be targeted at incapable people, meanwhile government should not only creat the opportunity for capable workers in urban and rural areas but carry out training program to sharpen the ability of unemployed workers.The expenditure of medical treatment to urban and rural residents should be enlarged to ensure the accessibility to basic treatments. However, the fiscal subsidy is contemporary and policy-guided, so it cannot be an eternal mearsurement. That is why it is not idealistic to improve fairness of society by subsidy and it should be wary to adopt the subsidy policy.The examination of balancing budget incidence implies that the progressive taxation of income and property can improse relatively great burden on the high-income so as to favor fairness of society, and if this tax revenue is transferred to the low-income, fairness of society can be further improved. Yet the effect of income tax and property tax is weakened by the difficulty in levying and some institutional factors. If indirect taxes with high tax rate are imposed on the luxurious goods with the income elasticity over 1, fairness of society can be improved while no tax or taxes with low rate on necessities. However, the effect is not so good as that of individual income tax and property tax if imposed.The processive research illustrates that it is comparatively fair to transfer the revenue gained from the tax levied according to the proportional tax rate to low-income individuals. As long as the revenue is allocated to the low-income, fairness of sociery can be improved, even if the revenue is from capitation.The narrowly focusing research on balancing budget incidence, the disparity between the urban and rural areas and the governmental housing policy demonstrates that the effect of the agricultural expenditure on bridging the gap is less obvious than that of the agricultural tax, even though the absolute amount of the former is greater than the latter. And this point exactly infers that the spillage of agricultural expenditure is so severe and the decrease or cancellation of the agricultural tax is a far better way to correct the disparit. So the governmental agricultural expenditure should keeps rising and the administration be improved by laws. Governments should intensify the supervision on housing market, by adopting new taxes and imposing higher tax rate in the process of purchasing grand real estates, circulating and maintaining the houses. As a result, the buyers of the luxurious houses mostly comprised of high-income individuals take the burden of these taxes and the tax revenue can be distributed to the housing security of the low-income.All in all, this paper implies that whatever the patterns of gaining revenue are, once the fiscal transfer works smoothly and the fiscal revenue is allocated to a reasonable transfer system, especially to the low-income, the income can benefit from the incidence of fiscal expenditure brought by the fiscal transfer and fairness of society can be improved.