The Heterogeneous Effects Of Fiscal Pressure On Tax And Non-tax Revenue

Currently,the global economic situation is becoming increasingly complex,and the voices against globalization are constantly rising.Additionally,China is in an important stage of economic transformation,with increasing downward pressure on the economy resulting in a slowdown in local government fiscal revenue growth.In this situation,the demand for fiscal expenditures continues to expand while the revenue and expenditure gap widens year by year,posing increasingly severe fiscal challenges for local governments.The comprehensive implementation of the "VAT reform" has further exacerbated the situation,causing significant problems such as financial difficulties at the grassroots level and imbalances in the supply of public goods,which pose significant challenges for local governments.Non-tax revenue is an important component of local government fiscal revenue,playing an important role in promoting regional economic and social development,providing public goods and services,and implementing macroeconomic regulation.However,due to its high discretion,county-level local governments often implement strategic management of non-tax revenue,leading to unreasonable expansion of non-tax revenue scale and causing structural problems in fiscal revenue.The fiscal pressure at the grassroots level may be an important reason for the strategic management of non-tax revenue by county-level local governments.Therefore,this study focuses on county-level local governments as the research object and has important implications for studying changes in non-tax revenue under fiscal pressure.Given the endogeneity issues associated with constructing fiscal pressure indicators,this paper adopts the 2010 education reform as a quasi-natural experiment.In 2010,the Chinese government launched the "National Medium and Long-Term Education Reform and Development Plan(2010-2020)",which explicitly set the goal of "increasing the proportion of national fiscal education expenditure to GDP,reaching 4% in 2012." Faced with rigid expenditure issues,local government fiscal pressure increased.Unlike existing studies,this paper focuses on county-level governments in Guangxi,using the major responsibilities reform as an opportunity to examine local government behavior under fiscal pressure.Using manually collected data from the Guangxi Financial Yearbook for the period from 2007 to 2019,this paper explores the impact of the education reform on non-tax revenue of county-level governments.In the introduction,this paper systematically introduces the research background and significance,defines the concept of non-tax revenue,summarizes the main research content,methods,and innovative points.In the literature review of Chapter 2,this paper thoroughly reviews the measurement and economic effects of fiscal pressure at home and abroad,the impact of fiscal pressure on government behavior,the definition and collection reasons of non-tax revenue,and the influencing factors of non-tax revenue changes.In Chapter 3,the institutional background and theoretical assumptions of education reform are briefly introduced,and based on the differences between tax revenue and non-tax revenue in collection,management,and expenditure,a hypothesis is proposed that local governments’ non-tax revenue will significantly increase in the face of fiscal pressure.Chapter 4 presents the empirical analysis,using data from the "China Statistical Yearbook" and the "Guangxi Financial Yearbook," selecting and organizing data from Guangxi’s district and county levels from 2007 to2019 as the research object,and using the Difference-in-Differences(DID)model for analysis.The districts and counties where the education expenditure ratio has reached 4% are taken as the control group,and the remaining districts and counties are taken as the treatment group to explore the impact of policy shocks.The empirical results show that the education reform has no significant impact on tax revenue but significantly increases the scale of local government non-tax revenue.The heterogeneity test finds that this policy effect is more pronounced in nonprovincial directly governed counties.Under the urgent and enormous fiscal pressure,"compensated use of state-owned resources(assets)income" in non-tax revenue will experience significant growth.Chapter 5 summarizes the research conclusions and proposes targeted recommendations: first,attention should be paid to the effectiveness and appropriateness of tax reduction and fee reduction policies;second,deepening fiscal and taxation system reform,rational division of central and local fiscal and administrative powers,and improving the high-quality growth mechanism of fiscal revenue;third,optimizing the local tax system,easing local fiscal pressure,and strengthening the law enforcement standardization of tax authorities;finally,accelerating the construction of the non-tax revenue collection and management system to regulate local government non-tax revenue behavior,strengthen non-tax revenue management,and improve the efficiency of non-tax revenue use.