Empirical Research Of The Relationship Between Fossil Energy Consumption Tax And Economic Growth

Since the industrial revolution, the development and progress of human society and economy, all depend on for more species (coal, petroleum, natural gas, nuclear energy) and the more the number of fossil energy development and utilization. China is a country with a large population, with the development of economy, the increasing use of fossil energy, energy’s insufficient use not only causes a serious waste of resources, but also brings huge environmental problems. To balance the relationship between economic development and energy saving and emission reduction is a severe challenge to China’s economic growth. Many scholars think tax is considered effective means to improve the environmental pollution in China by the research through the double dividend problem of environment tax.On the basis of the research method at home and abroad, this paper through the establishment of a computable general equilibrium model of tax on fossil energy consumption tax research. In this paper, the computable general equilibrium model is divided into three modules, namely, production module, consumption module and balance module. In the production module, we establish the Cobb Douglas production function which includes assets, labor and energy of three elements, and assume that the economies of scale invariant. In the consumption module, this paper contains two consumers, the government and the residents. Government revenue from tax income composition, income from labor income, and, in the government and residents’ income is only a part of expenditure. The tax will bring the price distortions, lead producer prices and consumer prices are not consistent, so as to bring the excess burden of taxation. This article believed that, the optimal tax rate of fossil energy consumption tax should meet the minimum excess burden of taxation. Because the excess burden of Taxation measure up to a certain degree of difficulty, this paper established a Cobb Douglas utility function to substitute, that total social utility maximum, minimum excess burden of taxation. Government consumption and household consumption of two factors including this utility function, that total social utility by government consumption utility and residents consumption utility composition. Simulation results show that when the fossil energy consumption tax rate is 29%, total social utility maximum, when the per capita output declined by 0.47%, per capita energy consumption is far greater than the decline in output per capita declined,22.95%. When the 29% tax fossil energy consumption tax, will make the energy consumption reduced by 22.95%, but only bring economic declines in the small 0.47%, can greatly improve the environment problems, environment balance and better economic development problems.In order to keep the neutrality of tax, this research uses a general equilibrium model to analyze the modification of tax system. When toning the capital tax, assuming a fixed labor tax, the capital tax is 21.7% if tax is maintained neutral. Compared with 45.65%, the capital tax that is determined when fossil energy consumption tax is optimized; it is reduced by 23.95%. The modification of labor tax follows the same way as that of capital tax, labor tax is 2.73% when tax is preserved neutral. Compared with 6.62%, the labor tax that is determined when fossil energy consumption tax is optimized; it is reduced by 3.89%. Unlike capital tax, the modification of labor tax results in a boost of the total social utility. Since the flexibility of capital output is considerably greater than that of labor output, lowering capital tax can motivate the usage of capital, thus, augment the economy. Therefore, modification of capital tax should be given top priority to that of labor tax when the neutrality of tax is fulfilled.