How to Balance Public Regulation and Steady Growth of Fiscal Revenue
The Third Plenary Session of the 20th Central Committee of the Communist Party of China highlighted the need to further deepen reforms,improve the socialist system with Chinese characteristics,and modernize the national governance system and capabilities.Modern state governance is complex and the diversification of governance goals de-mands a more advanced governance system.Balancing public regulation with fiscal revenue growth is a common chal-lenge for local governments in developing countries and a key issue in advancing China's modernization in governance sys-tem and capability.To reveal the main strategies of local governments in China under multiple goals,this article first constructs a static equilibrium model to analyze the optimal behavior strategies of local governments under public regulation shocks.The theoretical model results show that under the constraints of regulatory goals,to stabilize local fiscal revenue,local govern-ments will increase their tax efforts,which are mainly reflected in relaxing the regulatory enforcement intensity in tax-rich industries.To verify this strategy,this article uses the chemical oxygen demand(COD)emission reduction plan in the 11th Five-Year Plan as an example of environmental regulation to analyze the empirical effect of regulatory shocks on dif-ferent industries'corporate pollution emissions.The results show that although the environmental regulatory shock signifi-cantly reduces the COD emissions of key industries,compared with other industries,the pollution emissions per unit of output value of enterprises in tax-rich industries are significantly higher,indicating that local governments adopt looser en-vironmental regulatory policies for tax-rich industries.The common trend test results show that the empirical effect is mainly formed in the years after the policy shock,and not significant before the policy shock.More relaxed environmental regulation policies significantly promote various economic indicators such as operating profit,main business income,and total industrial output of enterprises in tax-rich industries.This behavior strategy not only achieves the public regulation goal but also significantly increases the proportion of fiscal revenue in GDP,effectively ensuring the stable growth of local fiscal revenue.Further analysis shows that the hypothesis of maintaining growth and stabilizing employment cannot ex-plain the empirical results of this article.This article has important implications for the continuous promotion of the modernization of China's national gover-nance system and governance capacity.Firstly,when setting various regulatory policies,the central government should fully assess the impact of the policies on local financial resources.Secondly,ecological and environmental protection su-pervision and law enforcement efforts should be strictly enforced to reduce the interference of local financial incentives and other factors on environmental governance.Thirdly,we should give full play to the role of scientific and technological in-novation to facilitate the realization of environmental policy porter effect.The contributions of this article are mainly reflected in the following aspects.Firstly,this article reveals a trade-off strategy for local governments in developing countries to deal with regulations under multiple goals.This article reveals a response strategy of local governments under diversified goals through theoretical models and empirical analyses,that is,providing differentiated public regulatory intensity for different industries to support the development of tax-rich industries that can balance regulatory goals and other public services.Secondly,this article provides new evidence of fiscal incentives in the field of environmental governance.However,there is little discussion on whether fiscal incentives play a role in China's environmental governance and the specific form of this role.This article provides evidence of the impact of fiscal incentives from the perspective of industry tax content,and finds that the local fiscal incentives and their effects are issues that need to be focused on in China's future deepening environmental governance.Thirdly,this article provides clues for China's long-term rapid growth of tax revenue.Some people believe that China's rapid growth of tax revenue is related to the development of high-tax industries,but the empirical evidence is relatively insufficient and the specific paths of local governments supporting such industries are not revealed.This article provides the most direct empirical evidence to sup-port this argument from the perspective of taxable GDP and further explores the important path of implementing weaker regulatory strategies for tax-rich industries.Additionally,this article helps to understand the trajectory of China's indus-trial development and the current fiscal balance mode.
Environmental RegulationChemical Oxygen DemandFiscal IncentivesTaxable GDP
万方数据
维普
