Research On The Green Effect Of Fiscal Revenue System In China

Government plays a decisive role in green development and ecological civilization construction,which is important to promote the modernization of national governance system and capabilities.Different from western developed countries,Chinese government,especially local government,is not only the environment protector,but also acting as polluter.As a key part to connect government and market,fiscal revenue can adjust the behavior of market entities by taxes and fees.which is also the funding basis for the government to provide public goods.Political and revenue Centralization,together with economic decentralization are the main characteristics of intergovernmental relations in china.It has a profound impact on the incentives of governments at various)levels.Ultimately,these impacts along with our giant fiscal size would directly or indirectly influence the regional industrial pollution or environmental quality.China has achieved great success in economic during the past 40 years.However,the increasing environmental crisis has a profound negative impact on the health of residents,and gradually becoming one of the most important public issues.China’s economic development has entered a“new normal”,the central government has given strong emphasis to the development of an ecological civilization.How does the fiscal revenue system perform in the formation of pollution or environmental protection?What role did the reform of vertical revenue management system,tax structure reform and tax sharing system play in this process?How to adjust the fiscal system to realize the goal of Green Development?These are the main contents of our dissertation.Based on the previous relevant research,we first systematically review the institutional transition of environment related fiscal revenue.Secondly,we empirically analyze the effect of fiscal revenue management system,tax structure system structure and tax share on the construction of ecological civilization.And lastly,we put forward some policy suggestions to optimize the fiscal revenue system in view of the above conclusion.These include:（1）For the purpose of macro-regulation and city construction,the prefecture-level government tends to keep more fiscal resources on the own,such as transfer payment and tax revenue sharing.It directly leads to serious financial difficulties for the county-level governments,and distorting its behavior and development strategy of governments.The third chapter empirically analysis the causal relationship between fiscal PMC（Province-Managing-County）reform and industrial pollution by use of DID method.The results show that:Compared with counties without reform,PMC reform has significantly reduced the pollution level of industrial enterprises.Further analysis shows that after the PMC reform,the development planning of the county government and assessment mechanism are closer to the provincial government,although the county government’s basic fiscal capacity（except for the land grant funds）has been enhanced,but the environmental enforcement force intensified,thus compared with other counties and cities,the GDP level decreased significantly and the added value of key polluting industry enterprises reduced.（2）Since the CPE and PMC reform are taking place at almost the same time,the third chapter also examines the environmental effect of CPE（county-power-expansion reform,CPE）reform.It comes to the following conclusions:Compared with the counties without CPE reform,the pollution level of the reformed counties has significantly increased.CPE reform intensifies the competition between municipal government and the county government.CPE reform also undermines the environmental enforcement of county government,and incentives county government to make full use of land and other resources to attract new enterprises.Overall,the CPE reform has a negative impact on environment.（3）With the transformation of growth drivers and the principal social contradictions,the economic effect of the existing tax structure is limited,but its side effect become more and more prominent.The fourth chapter examines the relationship between tax structure and industrial pollution by use of panel data.Over reliance on the commodity tax paid by enterprise gives local governments a strong incentive to introduce external investment and increase the number and size of enterprises,which will expand the tax base.During the process,the policies such as lowering the price of industrial land,loosening the environmental regulation and so on,will certainly increase the pollution level.（4）Tax sharing and the partition of government’s rights is the core of intergovernmental relations.The revenue-sharing system set the revenue proportion between central government and provincial government,while the tax sharing proportion below provincial government（include provincial government）is instable and varying among provinces,which creates uncertain expectations about the tax system and lead to the shortsighted development strategy implemented by local governments.The fifth chapter examines the environmental effect of the tax sharing system in china.We find that the increase proportion of VAT sharing has significantly raises the level of industrial pollution level,especially for the air pollutant-SO₂.Mechanism analysis shows that this is not only due to the increase in the number of air pollution enterprises,but also because of the relaxation of environmental regulations.The fiscal revenue system has not been satisfied the inherent needs of ecological civilization construction.Thus it need to deepen the reform and perfect the current fiscal system in order to create a modern public finance system.Finally,we get some suggestions:First,building an Environmental Governance system involving the government,enterprises and the public,and taking full advantage of the power of all parties to participate in pollution abatement.Second,the direct tax tool should be more emphasized as a way to reform the traditional tax structure.Third,take measures to construct main taxes for local government,alleviating the distorting effect of the instable tax sharing system.Fourth,promote the“reform of environmental power”,extent the responsibilities of higher-level government in environmental supervision and improve its fiscal expenditure responsibility in environmental protection.