%A Xie Huiming, Ma Jie, Shen Manhong %T Environmental Tax Collection, Transfer Payment Bias and Policy Combination Effect %0 Journal Article %D 2022 %J JOURNAL OF ZHEJIANG UNIVERSITY %R 10.3785/j.issn.1008-942X.CN33-6000/C.2021.12.214 %P 37-56 %V 52 %N 9 %U {https://www.zjujournals.com/soc/CN/abstract/article_123094.shtml} %8 2022-09-10 %X

Environmental tax is an important policy instrument for the government to solve environmental externalities. China’s environmental tax can be traced back to the resource tax in 1984 and some other environment-related taxes in the following years. On January 1, 2018, China began to formally levy an independent environmental tax. However, the tax is generally based on the principle of “tax burden shifting” to shift the fee to the tax based on the pollutant discharge fee system, and all the environmental tax is taken as the local government’s revenue according to the “Notice of the State Council on the Attribution of Environmental Protection Tax Revenue (No. 56)” issued by the State Council in 2017. In principle, environmental tax can be collected by the central, or the local governments, or both. Under different circumstances, the goal of “environmental governance” or “filling the gap” can also be realized in different ways. Meanwhile, the Chinese government has also revised and improved the “Measures for Transfer Payment from the Central to the Local Government of Key Ecological Functional Areas”, in the hope of achieving more significant environmental, economic and social performance through the combination of environmental tax and ecological transfer payment.The effectiveness of the environmental fiscal and tax policy portfolio and whether it can achieve multiple policy objectives need to be tested under the general equilibrium framework. A dynamic stochastic general equilibrium model including the environmental sector is developed to analyze the specific impacts of different governance arrangements and their combinations, mainly focusing on: (1) A single policy of vertical transfer payment; (2) Environmental tax-1: all environmental tax is taken as local income; (3) Environmental tax-2: environmental tax is shared by both the central and local governments; (4) The combination of vertical ecological transfer payment and environmental tax-2. The simulation results show that the environmental tax naturally has the function of pollution reduction and the environmental tax under the “fee to tax” translation system is not enough to make up for the fiscal gap of local governance, so the vertical ecological transfer payment is strongly recommended. Ecological transfer payment can effectively stimulate output, but its expansion bias will weaken or reverse its original intention of environmental governance, so it is necessary to highlight its green bias in the current stage. The combination of environmental tax-2 (shared situation) and vertical ecological transfer payment can maximize the total social welfare, and the “policy locking” effect is observed. Last but not least, the intensity emission reduction policy can change the environmental performance of environmental protection expenditure from negative to positive, and can considerably expand the choice set of environmental policies and their combinations.Therefore, first of all, the central government should participate in sharing the benefits brought about by the reform of the environmental tax system through certain mechanisms, and increase the central environmental protection expenditure and transfer more payments to families. Secondly, the construction of an ecological transfer payment system can have two dimensions: vertical and horizontal. Making the vertical ecological transfer payment of the central government green is an important phased task when the vertical ecological transfer payment is tended to be matched with the environmental tax. The reasonable and orderly connection between the transfer payment system of key ecologically functional areas and the ecological transfer payment system is an important direction of system reconstruction. Thirdly, given the environmental tax rate, local governments at all levels should actively look for a vertical ecological transfer payment level that is compatible with the optimal tax rate.