The Study On Ripple Effect Of Resource Tax Reform On PPI And CPI Based On Input-Output Theory

With the rapid growth of the economy in China, the demand for resource products also increased rapidly. But the irrational economic structure leads to the contradiction of non-renewable energy on supply and demand, gradually forming a shortage of resources, environmental pollution, the price system distortions and other social issues. Since the beginning of 1984,the method of resource specific tariff still existed 20 years, whose defects had been became more and more obvious. At present, the goals of China’s economic system reform are the adjustment of economic structure, the transformation and upgrading on industries. Under this background, the reform of ad valorem resource tax, which gradually deepen reform, has became one important part of China’s current supply-side structural of the reform. Therefore, the study of resource tax reform on China’s economic ripple effect is significant.The differences of this paper with previous researchers who mainly studied on the qualitative effects of resource tax reform on the economy are that the study idea of Input-output analysis theory is used. Using the index system of Input-output theory and the price tax policy simulation model based on Input-output partially close model, we can study the changes of structure feature of resource departments in industries and the ripple effect of ad valorem resource tax on PPI and CPI. Hoping to provide reliable and useful information to support on resource tax reform in optimizing resource industries’ structure and achieving effective allocation of resources.In the main part, the author studies the industrial correlation, the final demand structure characteristics, economic benefits and industrial coordination of the resource departments during the 2002 to 2012 by using four input-output tables and Input-output analysis theory. Then, the author studies and simulates the ripple effects on PPI and CPI under various tax rates by using the price tax policy simulation model based on IO partially close model, which reveals the ripple effect of ad valorem resource tax on commodity prices.The paper draws the following conclusions: Firstly, resource departments are important basic industries of the national economy, and they have strong constraints to economy. Secondly, resource departments are the industries depended on investment, whose social demands are greater than supply. Thirdly, the industrial structure of the resource departments with the non-resource departments are seriously inconsistent. Fourthly, ad valorem tax impacts on the second industry resources and transport departments most deeply, and the influence on the enterprise is higher than the residents. Fifthly, the reform of resource tax plays an important role in promoting the industrial structure adjustment and environmental protection.Finally, this paper puts forward some related policies and suggestions in improving the resource tax reform: Firstly, seizing opportunities to accelerate the pace of resource tax reform. Secondly, strengthening structural reform of the supply front. Lastly, taking into account the distribution of interests of different groups.