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Public finance lies at the heart of politics. It shapes citizens' political attitudes and behaviors. While the expenditure side has been studied very extensively, the income side has been neglected, especially in authoritarian regimes. Taking China as an ideal case, we use a nation‐wide random sample of urban residents to study how citizens under strong authoritarian states perceive their tax burdens. We find that Chinese citizens have low tax consciousness, defined as the perception of fairness both in comparison to people they know and to the amount of public goods they receive. Citizens' income, the amount of public goods they receive, and media consumption have important effects on their tax perception. We argue that there are three mechanisms used by China's "half‐tax state" to reduce their citizens' tax perception: (1) reduce the salience of people's tax burden, conditional on their income level, (2) generate fiscal illusion effects while providing public services in return for taxes paid, and (3) use propaganda to shape the ideology of tax compliance. [ABSTRACT FROM AUTHOR]

This study examines the influence of the reduction in value-added tax (VAT) rates in China during 2018 and 2019 on corporate financialization. By employing a difference-in-differences model and utilizing data from Chinese A-share listed companies between 2017 and 2020, we assess the effects of tax reduction policies. Moreover, it achieves this outcome through three main pathways: alleviating financing constraints, boosting fixed asset investment, and weakening corporate financial arbitrage motives. Further analysis demonstrates that the inhibitory effect of VAT rate reduction on corporate financialization is more pronounced for non-manufacturing companies, businesses reliant on the basic tax rate as their primary revenue source, companies with low intermediate input rates, and those with a strong ability to shift the tax burden. Additionally, debt financing costs play a crucial role in moderating the relationship between tax reduction policies and corporate financialization. The conclusions drawn from this study provide valuable empirical evidence that can contribute to the refinement of VAT reduction policies and the prevention and resolution of financialization at the micro-level. [ABSTRACT FROM AUTHOR]

This study examines how an important reform of local governance—village democracy—in the world's most populous areas has affected the happiness of residents in rural China. We find that introducing elections per se has no significant impact. In comparison, direct nomination of local leaders by villagers, which is a form of competitive election involving a high degree of public participation in political decision making, leads to higher levels of happiness. Further mechanism analyses show that direct nomination improves the local accountability of elected leaders by boosting the quality and effort of village heads and their governance performance by lowering the tax burden of villagers and vitalizing local public services. Our results highlight the importance of public participation in democracy and the underlying role of local accountability in affecting the subjective well‐beings of citizens. [ABSTRACT FROM AUTHOR]

Developing the marine economy, protecting the marine ecological environment, and speeding up the construction of marine power are important components of the Chinese path to modernization. To promote marine ecological preservation and high-quality development of the marine economy in a coordinated manner, China has carried out the construction of marine ecological civilization demonstration zones, aiming to deepen marine ecological governance and solve difficulties in marine development. Based on the panel data of 47 coastal cities from 2006 to 2019, this study regarded the construction of China' s national marine ecological civilization zones as a quasi-natural experiment, using the difference-in-differences method to explore the impact mechanism of this pilot policy on the coastal zone environment. The results showed that: ① The marine ecological civilization demonstration zones significantly improved the coastal zone environment and effectively promoted the pollution control of the coastal environment and nearshore water quality environment. ② Heterogeneity analysis showed that regional marketization level and local government promotion mechanisms had different moderating effects on the construction of marine ecological civilization demonstration zones. ③ The construction of the marine ecological civilization demonstration zones affected the coastal zone environment by increasing the intensity of the government' s governance and the tax burden on enterprises. Increasing the intensity of government governance could effectively reduce coastal wastewater and waste gas emissions but could not highlight its 'greening' effect on the nearshore water quality environment. Increasing the tax burden on enterprises was conducive to giving full play to the impact of market-oriented and paid management mechanisms on the coastal zone environment. This study focuses on the analysis of coastal zone environmental effects from the perspective of land and sea, which enriches the research on the impact of demonstration zone construction on the coastal zone environment. In the process of comprehensive regulation, we should uphold the concept of overall coordination between land and sea. While giving full play to the role of political guidance, we should effectively enhance the efficiency of economic governance and steadily promote the continuous improvement of the environmental quality of coastal zones. [ABSTRACT FROM AUTHOR]

This paper aims to evaluate and compare the distributive impact of the personal income tax (PIT) on individual's income in Brazil and China by measuring the Gini Index before and after this tax incidence. The paper also proposes a methodology for transposing the PIT backets from one country to another. The results show that a more progressive scheme implemented by China, with more brackets and higher rates, does not guarantee reduction of inequality, due to the level of income exemption and to the incomes on which the marginal rates affect. Thus, it can be perceived that the PIT brackets of these two countries deserves revisions if they seek to fulfill the distributive function. [ABSTRACT FROM AUTHOR]

Will such an audit system outside the taxation bureaucracy undermine or reinforce the effect of the under-institutionalized tax administration system in seeking cooperation from private businesses? Similarly, Zhang argues that the under-institutionalized tax administration system is critical in reducing the tax burden for private businesses, as the local tax bureau has discretion in tax collection. [Extracted from the article]

Individual attributes have been demonstrated to influence the entrepreneurial decisions of returnees, but little is known about the regional factors. This study employed a dual-level logistic model to explore the effects of both individual characteristics and regional context on returnee entrepreneurship in China. The results indicated the significance of both individual-level attributes and regional context in the entrepreneurial entry: regional prosperity, government fiscal expenditure, tax burden, rainfall, and transportation infrastructure significantly affected the entrepreneurial probability. This study extends the returnee entrepreneurship literature by first, elucidating the importance of regional context in entrepreneurship and second, highlighting the joint impact of economic, institutional, and geographical contexts. [ABSTRACT FROM AUTHOR]

The responsibility for carbon emissions tends to be different under different emission accounting principles. By applying the latest 2012 Chinese multi-regional input–output table, this study evaluated the impacts of carbon tax on tax burdens and sectoral competitiveness in Chinese provinces when considering either production-based or consumption-based emissions. Our results indicated that, in the scenario of cutting production tax for carbon tax, the developed provinces, such as Beijing, Shanghai, Zhejiang, and Jiangsu, who are much bigger payers of production tax, are net beneficiaries of carbon tax. In contrast, recycling the tax revenues to low-income households makes the less-developed provinces in the central and western China become net revenue receivers. Furthermore, for competitiveness effects, the emission intensive sectors, such as Electricity and hot water production and supply, Petroleum and gas, and Metal products, are impacted vitally under both accounting principles in all provinces. Nevertheless, compared with the production-based principle, a consumption-based carbon tax could reduce the unfavorable competitiveness effects of most affected sectors in the less-developed provinces, while slightly increasing those effects in the developed provinces. Our results provide new information on the regional impacts of carbon tax based two different accounting principles with different tax revenue recycling scenarios. [ABSTRACT FROM AUTHOR]

Fierce competition among county-level governments has substantially increased disparities in public service provision and housing markets across urban China. The role of the changing intracity administrative structure deserves scholarly, attention in this process. Building on an interdisciplinary literature of public choice and cadre promotion theory, we propose that interjurisdictional competition enlarges the intracity fiscal disparity under China's transitional administrative and fiscal systems. Results from fixed-effect panel data modeling confirm that cities with higher level of interjurisdictional competition are associated with higher intracity fiscal disparity. This study demonstrates how transition and decentralization of the centralized fiscal system have long-term, intended and unintended, impacts on fiscal inequality and urban stratification. With continuous urban sprawl, jurisdictional annexation, and large-scale urban-to-rural migration, our study suggests that policies attempting to equalize public service distribution within cities need to consider the administrative structure at the local and regional levels. [ABSTRACT FROM AUTHOR]

Since Chinese government put a target to decrease carbon intensity 40–45% in 2020 than that of 2005, a series of emission mitigation measures has been implemented. Against this backdrop, we established a system dynamics model to investigate the energy consumption, CO 2 emission and mitigation options in China. The results show that the carbon intensity will reduce by 22.68%, 26.84%, 43.77%, and 46.65% in BaU (Business as usual), NEP (New energy policy), CTP (Carbon tax policy) and IP (Integrated policy) scenarios in 2020 compared with 2005. Obviously, Chinese government can accomplish the target under CTP and IP scenarios. Moreover, the “inflection point” in CTP and IP scenarios reveals the decision-making process between tax burden and emission reduction behavior. A brief analysis of interactive effect is accomplished by equilibrium theory and simulation results. It shows that the interactive effect of two policies, which act on the same object with same action direction, is weaker than the aggregation of two separated effects, whereas it is larger than any individual effect. In a nutshell, these findings are helpful for policymakers to optimize their policy decision-making to cut CO 2 emissions. [ABSTRACT FROM AUTHOR]

How do differences in the motive for conspicuous consumption in the United States and China affect the incidence of taxes in those countries? In this paper I develop a model of conspicuous consumption in which a consumer cares not only about the direct utility she receives from consumption, but also about the way her consumption pattern affects her peer group's belief about her well-being. Estimating the model on American and Chinese data, I find that a Chinese consumer cares 20% more than an American consumer about peer beliefs. I use the estimated model in several experiments related to tax incidence. I find that the 1990–2002 American luxury tax on automobiles led to widespread but small welfare gains, and that the stronger Chinese motive for conspicuous consumption leads to fewer households harmed and larger median welfare gains from a 10% tobacco excise tax. [ABSTRACT FROM AUTHOR]

Environmental taxation is regarded as an effective tool to improve air quality in China, but its distributional effects causing serious disparity among multi-groups and multi-regions are understudied. Here this paper constructs a multi-regional dynamic recursive computable general equilibrium (CGE) model to explore the distributional effects of China's environmental taxation among different income groups and regions, by specifying the elasticity parameters of urban households' consumption in the model, and combining with various micro-data such as household survey data and environmental statistics database. This paper simulates the air pollution reductions of China's environmental taxation, and the impacts on the income and expenditure of households with various environmental tax rates or manners of tax revenue recycling. Results have shown that China's environmental taxation will widen the gap between different income groups and different regions. Also, such adverse distributional effects will be increased by higher environmental tax rates. However, recycling environmental tax revenues to both households and enterprises can reduce the losses of households' income and consumption. Yet recycling revenues to enterprises is more effective in narrowing the gap between income groups and regions while improving regional economic development. Our findings may pave a way to design appropriate environmental tax rates and tax revenue recycling manners for China's future environmental tax policies at the regional level. [Display omitted] • A multi-regional CGE model is constructed to explore the distributional effects. • Various environmental tax rates and tax revenue recycling manners are considered. • Low-income households and underdeveloped regions will bear more tax burden. • Recycling revenues to enterprises is more effective in reducing wealth disparity. [ABSTRACT FROM AUTHOR]

The goals of carbon peak and carbon neutrality pose new challenges to China's economic growth and carbon reduction efforts. Regarding synergy of policies, a dynamic general equilibrium model is constructed to analyze the feasibility of achieving carbon peak. We find that, compared to other greenhouse gas (GHG) mitigation regulations, carbon taxes are more effective in curbing pollution emissions; hence, it is critical to implement carbon taxes in China. However, complete reliance on carbon taxes means formulating a tax rate that is four times higher than the constraints of the 2019 GHG mitigation regulations, which translates to a tax burden of 0.28%. Although current market-guided policies based on a service-oriented green finance approach can partially supplement the policy effects of carbon taxes, a guidance-oriented green finance approach is more effective because of its dual functions of guiding green investments and serving green industries. Such an approach leads to a comparatively lower carbon tax rate that is roughly two times higher than the constraints of the 2019 GHG mitigation regulations and a tax burden of 0.2%. We further show that in transitioning to carbon neutrality, a guidance-oriented green finance approach can generate optimal allocation effects of capital and environmental resources, thus promoting carbon reduction and green transformation. This study provides theoretical and quantitative reference for implementing carbon taxes and transforming green finance in China. [Display omitted] [ABSTRACT FROM AUTHOR]

An institutional environment of fair competition helps to enhance the economic performance of enterprises, while its potential environmental effects are often ignored. In 2008, China implemented a unified corporate income tax merger policy that set the same tax rate for domestic and foreign-invested enterprises to make the domestic enterprises competitive with foreign-invested enterprises in a fair tax environment. Taking this policy as a quasi-natural experiment, we conduct a difference-in-differences estimation to identify the impact of a fair competition environment on firm-level SO 2 emission intensity. The results show that the fair competition environment significantly reduces the SO 2 emission intensity of domestic enterprises in China. This finding also remains robust after considering factors such as various settings, metrics, and potential impacts. The possible mechanisms through which this policy shock affects firms' SO 2 emission intensity are manifested by reducing corporate tax burdens, alleviating corporate financing constraints, promoting industry competition, elevating the production capacity of enterprises, and reducing the amount of pollutants generated. We also find firm-level SO 2 emission intensity responses to fair competition vary with firm ownership, location, and industry pollution intensity. Hence, improving conditions of fairness in the market can bring about a win-win result for both the economy and the environment. [ABSTRACT FROM AUTHOR]

Summary We provide firm level empirical evidence that the presence of foreign direct investment (FDI) has positively affected the institutional quality of the host regions in China. Specifically, Chinese domestic firms located in regions with a higher level of FDI tend to enjoy a lower level of tax and fee burdens, less arbitrariness in such burdens, as well as better legal protection. To address the potential issue of endogeneity, we adopt the instrumental variable approach. In addition, we explore the specific mechanisms through which the institutional impact is materialized and provide various extensions of the empirical findings that offer further support for the FDI-induced institutional improvement argument. [ABSTRACT FROM AUTHOR]

Many studies have verified that zombie firms have serious negative effects in the economic field, but it is unclear whether those effects will extend to the environmental field. Based on China's firm-level data, this paper investigated the impact and mechanisms of zombies on wastewater discharge behavior by normal firms. The empirical study showed that the higher the proportion of zombies in a province is, the greater is the wastewater discharge by normal firms, which proves that zombies also have serious negative effects in the environmental field. The first mechanism is tax burden, which means that an increase in the proportion of zombies will induce the local governments to raise the actual tax rate on normal firms, which will worsen their financial situation and prompt them to increase wastewater discharge. The second one is institution quality, which means that the higher the proportion of zombies in a province is, the worse is the institution quality. In a low-level institutional environment, it is difficult to form effective governance on pollution. The last one is regulation power, which means that the higher the proportion of zombies is, the stronger is the incentive for local government officials to pursue GDP by relaxing environmental regulations. The contribution of this study is an extension of the research on zombies to the environmental field, which is significant to the in-depth understanding of the widespread, global problem of zombies. This study provides an important idea for countries committed to environmental protection. In addition to direct channels such as environmental regulation, indirect channels such as reducing unreasonable government intervention, speeding up the clearance of inferior firms, and creating a healthy market environment are also of enormous importance. • This paper pushes forward the researches on the negative effects of zombie firms to the environmental field. • The higher the proportion of zombies in a province is, the greater is the wastewater discharge by normal firms. • Tax burden, institution quality and regulation power are important mechanisms. • For government, less intervention may also play a significant role to enhance the environmental performance. [ABSTRACT FROM AUTHOR]

In the late 1990s, China enacted a rural tax reform known as the “Tax-for-Fee Reform” (TFR), largely driven by a desire to address farmers' complaints about what they perceived as a heavy and regressive tax burden. This study examines the impact of the TFR on inequality in rural villages in China. Our results suggest that the TFR plays an effective role in reducing inequality within villages. Its impact on a consumption-based measure of inequality took effect immediately; its impact on per capita household income inequality took somewhat longer. Our results also suggest that it was “rich” and/or “coastal” villages that exhibited a significant reduction of inequality as a result of the TFR, whereas “poor” and/or “inland” villages experienced no significant changes in inequality from the reform. [ABSTRACT FROM AUTHOR]

Abstract: This paper empirically tests the effects of taxation on economic performance using prefectural level city and county data from China. Results based on cross-sectional data from over 200 prefectural cities in 2007 indicate that overall tax burden and tax structure affect economic performance. Specifically, tax burden has a negative correlation with economic activities. Empirical results from the analysis of disaggregated local data for over 2,000 counties in China also support the hypothesis that distortionary taxation lowers the economic activities. These findings provide empirical evidence from China on a negative relationship of the total tax burden with economic activities. [Copyright &y& Elsevier]

The article focuses adoption of double tax agreement (DTA) by New Zealand with Hong Kong, China in order to improve problem of double taxation. It discusses the benefits of DTAs with tax haven countries like Hong Kong which includes much less tax revenue than the states with which it contracts and reduces tax burden on both countries. It also discusses the introduction of Organization for Economic Co-operation and Development (OECD) project against tax competition.

By measuring the tax burdens for both Chinese urban and the rural households in the 1990s, we find that the taxes on the urban households were mainly indirect taxes through consumption of goods and services while those on rural households were largely direct taxes such as state agricultural taxes, local fees and tuition. Although the incomes of rural households were much lower than those of their urban counterparts, rural households were taxed much more heavily than their urban counterparts. By calculating the total tax burdens for different income groups of both urban and rural households, we find that rural tax in general was much more regressive. The main reasons for rural tax becoming more acute in the 1990s were the increasing rural income disparity and the uneven tax incidence biased against poorer households. Policy implications are drawn for the ongoing rural tax reform, the rearrangement of inter-governmental relationships as well as improving local governance in China. [ABSTRACT FROM AUTHOR]