【世界银行】中国的财政政策如何再分配？税收和支出分配影响的新证据-2024.9

Summary of "How Redistributive Is Fiscal Policy in China?"

Core Content

This paper investigates the redistributive impact of China's fiscal policy, focusing on the role of taxes and government spending in reducing inequality. Using data from the 2018 China Family Panel Study (CFPS), the authors apply fiscal incidence analysis to assess how the fiscal system affects income distribution across different segments of the population.

Main Findings

• Fiscal Policy Redistributes Effectively: China's fiscal policy reduces inequality by about 10.3 Gini points, placing it around the median of upper-middle-income countries in terms of redistribution effectiveness.
• Education and Health Spending Drive Redistributive Effects: The majority of inequality reduction is attributed to in-kind education and health benefits and social security contributions, which are progressive in nature.
• User Fees Pose a Challenge: Despite the progressivity of some fiscal instruments, health user fees are relatively high compared to disposable income, potentially discouraging access to healthcare for lower-income families. Similarly, school-related user fees suggest that raising children is costly for many.
• Cash Transfers Are Limited: While cash transfers are equalizing, their contribution to reducing inequality is relatively small.
• Progressivity of Taxes Can Be Enhanced: The paper suggests that personal income taxes are underutilized and that increasing their progressivity could help reduce inequality more effectively. This would involve collecting more from those who can afford to pay and leaving more money in the hands of the poorest.
• Social Security Contributions and Pensions: The employee's social security system (urban workers) collects significantly more than the resident's system (rural and urban residents), which is more limited in scope and contribution levels. The resident's system includes basic pensions and medical insurance, but the benefits are much lower compared to the employee's system.
• Fiscal System Mix: China's fiscal system is relatively less reliant on personal income taxes and more on social security contributions and VAT, which are less progressive. This contrasts with high-income countries that typically rely more on progressive taxation.
• Trends in Fiscal Policy: Between 2014 and 2018, there was a notable increase in the share of revenue from social security contributions and VAT, while the share of other direct taxes (e.g., personal and payroll taxes) decreased.

Key Elements of the Fiscal System

• Total Revenue (2018):

  • 26,197 billion RMB (3,950 billion USD), or 29.1% of GDP.
  • Tax revenues account for 59.7% of total revenue, with VAT being the largest component at 29.7%.
  • Social security contributions make up 30% of total revenue, mostly from the employee's system (28.7%) and a small share from the resident's system (1.3%).
  • Non-tax revenues account for 10.3%, but are not included in the analysis due to data limitations.

• Total Expenditure (2018):

  • 22,090 billion RMB, or 24.5% of GDP.
  • Social expenditure accounts for 36.9% of total government spending, with education and health care being major components.
  • Direct transfers (e.g., Dibao, Tekun, temporary relief) make up 0.7% of total government expenditure, which is low compared to other upper-middle-income countries.
  • Debt servicing and non-social expenditures (e.g., infrastructure, defense) are not included in the analysis due to the difficulty of assigning individual benefits.

Methodology and Limitations

• The analysis combines administrative data on government revenues and spending with household survey data to assess the distributional impacts.
• The study includes personal income tax, social insurance contributions, VAT, consumption tax, cash transfers, contributory pensions, and education and health spending.
• Corporate income tax, other taxes, and non-tax revenues are excluded due to the lack of data on their distributional impact.
• The resident's social security system is treated differently from the employee's system, as it is more transfer-like and less progressive.

Policy Implications

• There is room for improvement in the progressivity of China's fiscal system.
• Increasing the share of progressive taxes (e.g., personal income tax) and expanding cash-based social benefits could enhance the redistributive effect.
• User fees on health and education services are relatively high, which may prevent access for lower-income families.
• The shift in revenue composition between 2014 and 2018 indicates a greater emphasis on social security contributions and VAT, but not on more progressive taxation.

Conclusion

The paper highlights that while China's fiscal policy has made significant progress in reducing inequality, it is not as progressive as it could be. The main redistributive tools are education and health spending, and social security contributions, but user fees and limited direct transfers pose challenges. Enhancing the progressivity of the tax system and expanding social benefits could lead to more effective inequality reduction in the future.