| In the Report to the 19 th CPC National Congress,《Secure a decisive victory in building a moderately prosperous society in all respects and strive for the great success of socialism with Chinese characteristics for a new era》,President Xi mentioned that,“As socialism with Chinese characteristics has entered a new era,the principal contradiction facing Chinese society has evolved.What we now face is the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life.”This important political assertion means that China’s income distribution system will be,once again,adjusted as China’s economic development stage moves toward to the basis of finishing the building of a moderately prosperous society in all respects.The perspective of the policy will be more emphasizing on fairness;other than the efficiency prioritization and fairness second style Since the Reform and Opening.Therefore,narrowing the gap between the rich and the poor is now an important direction of the government.As an important tool for the government to realize its regulation of income distribution,taxation has attracted more and more attention.The report of the 18 th National Congress of the Communist Party of China puts forward new requirements for the establishment of the taxation system from the aspects of optimizing structure and social equity;thus,from this idea,after reviewing the literature review and theoretical basis,the actual demand for social resources by consumers on behalf of residents can better reflect the gap between the rich and the poor.Therefore,it is necessary to study the impact of taxation on the difference of residents’ consumption.This paper focuses on the topic about the major taxes affecting the issue of consumption differences of residents,consists of 7 chapters.Chapter 1 is an introduction.Through the discussion of the research background of this paper,the significance of the research is explored,the research content of this paper is summarized,and the research framework is given.After the research data and research methods are briefly explained,the innovation points of this paper and the limitations of the research are summarized,with a look forward to possible future research directions.Chapter 2 is a literature review.We combed the literature from f Ive aspects,including: the source of consumption gap,the measurement and trend of consumption gap,the formation mechanism of consumption gap,the impact of tax on consumption gap and the research status of QUAIDS model.There are also a briefly reviews on the literature and the research methods of the above literatures.Chapter 3 is the theoretical basis.Four aspects are discussed in this part: tax efficiency and fairness theory,tax burden transfer theory,taxation on household consumption decision-making and other factors affecting consumption decision-making;and briefly explains the application of relevant theories in this paper.Chapter 4 analyzes the current differences of household consumption.Since the focus of this paper is on the impact of taxation on household consumption differences,it is necessary to have an in-depth understanding of the current situation of China’s residents’ consumption differences before discussing the regulatory role of taxation.Based on this consideration,we first discuss the Gini coefficient on the measurement method of consumption difference;on this basis,we use the available household consumption data of different income levels in the province to measure the consumption difference of urban,rural and all residents,and Further decompose the consumer Gini coefficient from the perspective of factors and groups,and explore the main reasons for the differences in consumption among residents in China.Chapter 5 analyzes the adjustment effect of the major taxes on the consumption differences between urban and rural residents.On the one hand,it analyzes the trend of the Gini coefficient of urban and rural residents’ consumption and analyzes the main factors of the change of consumption gap between urban and rural residents through the decomposition of Gini coefficient and the Gini coefficient on the consumption level of urban and rural residents and the elasticity of urbanization.On the other hand,by introducing the tax burden factor into the Gini coefficient and using the MT index,the adjustment effects of direct and indirect taxes on urban and rural residents’ consumption differences are explored from two stages: pre-‘VAT reform’(2009-2012)and post-‘VAT reform’(2014-2016).Chapter 6 analyzes the adjustment effect of major direct and indirect taxes on urban residents’ consumption gap.Consistenting with the impact of direct tax on the rural-urban consumption difference,the direct tax aslo have oppositive impact on the urban residents’ consumption difference.As for the direct taxes,first,considering the impact of taxation in different sectors and taxation and tax incentives on effective tax rates,we use the input-output price model to measure the effective tax rate of each input-output sector;On this basis,the indirect tax burden of urban residents with different income levels is analyzed,and the impact of taxation on urban residents’ consumption distribution is analyzed by MT index.Secondly,based on the QUAIDS model to estimate the parameters of urban residents’ income share of different income levels,through elasticity analysis,it is analyzed that residents may have tax-transfer in various types of consumption.Finally,through the input-output price model combined with the pull index and analysis of the price effect of the tax reform on each input-output sector and various types of consumer spending,the impact on urban residents’ consumption differences from the two dimensions of tax burden change and consumption expenditure change is analyzed.Chapter 7 is the conclusion and policy recommendations.It proposes specific policy recommendations based on combing the main conclusions of the article.In this paper,based on the research questions,with a variety of research methods,there are mainly three aspects of the discovery:First,through the measurement of urban residents’ internal consumption differences,rural internal consumption differences,consumption differences between urban and rural residents,and national consumption differences,it is found that there is a downward trend during the study period,and the overall household consumption gap is reduced to the warning line(0.3546).In the following,the difference between the consumption difference between urban and rural residents and the internal consumption of rural residents is the first two declines,but the difference in internal consumption of urban residents shows signs of rising from 2014 to 2016,reflecting the urbanization the advancement of urban residents has accompanied the differentiation of wealth and consumption.The numerical performance of the difference in consumption is mutually reinforcing.The urban-rural decomposition of the difference in household consumption shows that: Although the consumption difference between urban and rural residents still occupies the dominant position of the current consumption gap in China,its contribution rate is declining,and the contribution rate of urban residents’ internal consumption gap to the overall consumption difference is rising;In the future,the difference between urban and rural residents may become the main contradiction in the consumption difference of China’s residents.This situation has already appeared in highly urbanized areas such as Beijing and Shanghai.Second,although the contribution rate of urban-rural consumption differences in the overall difference in household consumption is decreasing;at present,the consumption disparity between urban and rural residents is still the main contradiction that causes the imbalance of Chinese residents’ consumption.From its changing trend,from 1979 to 2013,with the development of the economy,the Kuznets inverted U-shaped trend,which first rises and then falls,reached its highest point in 1999 and is currently in a downward channel.Further,in exploring the role of taxation in regulating the urban-rural consumption gap,it is found that,between 2009 and 2012,both direct and indirect taxes have a positive adjustment effect on urban-rural consumption gap,and only direct taxes in the literature are conducive to narrowing the income gap between urban and rural residents.Differently,to a certain extent,the reasons for the decline in the consumption gap between urban and rural residents at the same time are greater than the income gap between urban and rural residents.In addition,from the point of view of tax classification,before the ‘VAT reform’,the business tax is not conducive to promoting the consumption fairness between urban and rural residents,and the‘VAT reform’ has effectively avoided the business tax while stabilizing the original balance effect of the VAT.The differentiation effect,while the positive adjustment effect of consumption tax on urban and rural residents’ consumption differences is gradually increasing.As far as the difference between urban and rural residents in various consumption expenditures is concerned,indirect taxation is not conducive to promoting the consumption fairness of urban and rural residents in the fields of culture,education,entertainment and health care.The implementation of comprehensive ‘VAT reform’can slightly alleviate this negative effect;but it can’t be completely reversed.To realize the strategic intention of“Developing education to a strong country” and "Healthy China 2030",China’s indirect tax system needs further reform and optimization in the future.Third,the increase in the internal consumption difference between urban residents and the increase in the contribution rate to the overall consumption difference means that it may become a major factor hindering consumer equity in the future.Based on the indirect tax closely related to household consumption,based on the 2012 input-output table,using the input-output price model to measure the indirect tax burden of urban residents’ consumption expenditures of different income levels in 2012,the study found that value-added tax,business tax and the proportion of consumption tax in consumer spending will increase as the income level of urban residents increases.In terms of the eight major categories of consumer spending,urban residents have a greater indirect tax burden on residential,transportation,and other goods and services.Excluding these tax burdens,it can be found that the Gini coefficient of urban residents’ consumption is reduced,which means that the indirect tax collection is not conducive to promoting the internal consumption fairness of urban residents.Among them,the negative effect of business tax is the strongest,and the value-added tax is closely followed.At the same time,the differentiation effect of indirect taxes is also reflected in the consumption of urban residents in food,transportation and communication,and culture,education and entertainment Based on that,this paper simulates the impact of “VAT reform” and VAT reform on urban residents’ burden and consumption Gini coefficient.The study finds that “VAT reform” will reduce the indirect tax burden of the whole urban residents.However,the higher collection capacity of VAT will lead to an increase in the cost and price of some service sectors,thereby increasing the tax burden of urban residents in the health care category and transportation and communication.Although the current downward adjustment of the VAT rate can greatly alleviate the increased tax burden in this area,it cannot be completely offset.Despite this,overall,“VAT reform” and VAT reform can slightly reduce the indirect regulation of indirect taxes on urban-rural consumption differences.The innovations of this paper mainly have the following two aspects:The first aspect lies in the application and expansion of the research side data and methods.First,the main problem in the literature when using macro data to measure residents’ income or consumption of Gini coefficient is that the resident group data published by the National Bureau of Statistics is too small,so that the calculation results are underestimated because of the neglect of differences within the group.Therefore,based on the mathematical derivation,it is confirmed that the number of groupings will significantly affect the calculation results of the Gini coefficient,and the consumption expenditure data of urban and rural households grouped at different provincial income levels can be calculated and aggregated to calculate the Gini coefficient of household consumption.This application has not been found in existing literatures;Second,the literature has used the input-output price model to estimate the price effect of the tax policy,which generally stays in the price effect analysis of each input-output sector.Based on the idea of price index,this paper uses the Laspeyres index to estimate the relative effect of various types of consumption of residents based on estimating the price effect of the input-output sector;Third,the domestic literature analyzes that different income levels of residents may use the linear expenditure system when they pass on the tax burdens of various types of goods they consume;which is ignoring the fact that the actual share of residents’ expenditure on various types of commodities may change quadratically with total expenditure.Therefore,by using the QUAIDS model for analysis,this paper is enriching the research in this field.Another innovation is about new discoveries.Overall,the difference in consumption of residents in China shows a downward trend.The main reasons and secondary causes of the consumption gap in China are the differences in consumption between urban and rural residents and the differences in internal consumption of urban residents.Urbanization plays an important role in the consumption difference between urban and rural residents,but the decline in the ratio of urban and rural residents’ consumption is the root cause of the difference in consumption between urban and rural residents.Personal income tax,value-added tax and consumption tax have positive adjustment effect on improving the consumption difference between urban and rural residents,and business tax is not conducive to promoting the consumption fairness of urban and rural residents.Therefore,“VAT reform” can effectively reduce the consumption difference between urban and rural residents.In terms of the difference in consumption of urban residents,the indirect taxation is not conducive to promoting the fairness of urban residents’ consumption;The degeneracy and downgrade of “VAT reform”and VAT rates can reduce the consumption difference between urban residents to a certain extent,but it cannot eliminate the negative effects of indirect taxes on urban residents’ consumption completely. |
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