Policy Orientation of China Consumption Tax Reform in Ecological Civilization〔＊〕

Li Jiakai

（School of Economics Guizhou University of Financie ＆ Economics，Guiyang Guizhou 550025）

Ⅰ.The construction of ecological civilization and consumption tax reform in China

Since China began to levy consumption tax in1994，the taxable items related to environmental protection and resource conservation have gradually been increased.But the gap is obvious compared with the developed countries.Chen Yumei（2014）proposed that，after comparing China’s and international green-ing degree，there are some aspects of deficiencies in China’s consumption tax.First，the tax rate gap between unleaded and leaded gasoline is unobvious and not conducive to guide the consumers to choose“clean”gasoline；also，the refined oil tax rate is lower than in EU and other countries.Second，the number of“green taxable items”is decreased.Coal，natural gas，battery，and the solid waste，sulfur dioxide and other international taxable items are not included.

Through the above analysis，we find that the types of“green taxable items”can not meet the needs of ecological civilization construction.Therefore，the consumption tax reform is necessary.This requires the reconstruction of the consumption tax’s functions and constraint conditions at the stage of ecological civilization

Ⅱ.The functions and constraint conditions of consumption tax in ecological civilization

Consumption tax is a turnover tax levied on goods turnover，which is divided into special consumption tax and general consumption tax.The special consumption tax is a tax on particular commodities，such as the restricted consumer goods，luxury goods，resources goods and environmental polluted goods.General consumption tax is levied on general goods in addition to the special consumption tax items.China’s consumption tax is included in the tax system as an independent tax and levied in a selective way.In 2006 and 2009，the tax range and the structure of the tax rate were implemented respectively，which highlighted the functions of consumption tax adjustment，income redistribution and energy saving and emission reduction.In ecological civilization construction，the function of consumption tax will be adjusted and the key is to increase the ecological connotation and function.

1.Income redistribution function.

Marx pointed out that“The source of the tax is the labor of the people”.According to Marx’s view，with the basis of country’s political power，tax is a specific way of distributing social surplus products or the surplus value in social reproduction system.“It is the transaction of capitalists and workers creates all subsequent surplus value in the form of rent，commercial profit，capital interest，taxes contribution among the distribution of capitalists and their servants.”

Western scholars also believed that while the consumption tax affects the price of consumer goods，it also offers various corresponding income distribution effect to different needs of consumers.Western scholars generally determined the level of the tax rate according to the elastic consumption demand.Hao Chunhong（2012）used the model to measure the consumption tax’s effect to the adjustment of income gap.She considered that the elastic tax on low demand income will increase the tax burden，while the tax on high demand income can promote fair distribution.When the consumption tax increased from5%to 8%，the price did not just increase by 3%to the public.It actually increased a-bout 10%.Therefore，we should pay more attention to the income redistribution function of consumption tax.

China is a socialist country，but the tax’s function of income redistribution still exists.Ecological civilization construction needs to levy on ecological environment fragile products or scarce resources.However，those areas are mainly poor minority areas，where taxation will further expand the gap between the rich and the poor.Similarly，with the increase of rural income，the original luxury goods that should be taxed also come into the ordinary people’s home and become a necessity of life.This is the problem we should take into consideration when designing the consumption tax reform program.

2.Functions of regulation and guidance

The main feature of the consumption tax adjustment and consumption guidance is the“sumptuary taxation”，which means to levy tax on those products and services detrimental to people’s physical and mental health.The industrial structure should be gradually adjusted by regulating and guiding the consumption with the state’s encouraging policies.Of course，the scholars of this study proposed that the function of the regulation and guidance may be not effectual as expected.Huang Jing （2014）proposed that although products as tobacco and alcohol are the objects of consumption tax，the elasticity of demand is very small for those consumers who have been addicted to them.Therefore，the effect of regulating consumption through increasing tax is not so obvious.In addition，as China has become more open，the domestic tax on luxury goods will make the country’s consumption of them transferred to foreign countries and cause the phenomenon of “nourishing water flows into others’field”（which means the benefits flow to foreign counties）.The adjustment of industrial structure cannot work by only depending on the adjustment of tax.One reason is that the adjustment of the industrial structure needs to be supported by innovative technology.Another reason is that the traditional mode of production still has high profits and the power of new technology would be deficient if the means of mandatory shutting down is not adopted.

3.Functions of ecological civilization construction

The concept of ecological taxation came into being in China’s new era of ecological civilization construction.Ecological civilization were stressed as the eighth part of the entire report of the 18th Party’s Congress，which covers the environment protection，resource conservation，energy conservation，development of renewable resources，and water，air，soil and other pollution control contents.It should be said that the construction of ecological civilization conforms to the ecological ideas of Marx.And it is the correction of the alienate relationship between human and nature in the development of capitalist industrial.However，the pollution and environmental damage in the time of Marx was not as serious as it is now，but the profound philosophical thinking is self-evident.From the perspective of western scholars，the developed countries have recognized the importance of the ecological environment and made use of the“environmental tax”，“green tax”，“environmental protection tax”and other names to internalize the ecological costs.

The concept of ecological tax includes not only the kind of consumption taxes，but also the general term of related taxes that the country raises to achieve specific ecological and environmental protection objectives and to regulate the behavior of the taxpayers.Further，it not only includes the tax for ecological environmental protection，but also involves the practical measures.There are four main types：the pollution tax on the pollutant or behavior of pollution；the resource tax on the exploitation and usage of resources；the ecological tax on the destruction of the ecology and the comprehensive environmental tax to raise money for ecological environment protection.The collecting objects include products that may cause pollution and direct pollutants.The tax also can be levied from the initial source of pollution.

In present China，the main ecological tax is the consumption tax，which is called by some scholars the “green process of consumption tax”.Compared with the developed countries，we are lagging behind in the ecological tax，which is reflected in the aspects of narrow range，low tax rate and the unfair tax collection，etc.Currently，“green tax”of the consumption tax in our country only involves 10 and a total of 23 varieties.But the prevailing international taxes of coal，natural gas，battery，and the solid waste，sulfur dioxide and other taxes are not included.After the research on the gasoline，the enterprise tax burden of low sulfur fuel oil and home heating oil，Zhao Liping （2013）considered that China’s consumption tax rate is low compared with that of the western developed capitalist countries，which caused the burden of enterprise with low sulfur fuel oil and home heating oil tax，and meanwhile the gasoline tax is low.In addition，the pricing can be transferred through the related enterprises to avoid the tax if the production link is levied.

Ⅲ.The basic principle of consumption tax reform in ecological civilization

At present，China’s economic development has entered a new normal and the difficulty of building ecological civilization has increased.The green tax is bound to bring many aspects of effects through the reform of the consumption tax especially the way of increasing.Western capitalist developed countries have achieved obvious results because of its rich capital accumulation，the accumulation of green technology and the general awareness of the citizens to pay taxes.But during the process we carry out the consumption tax reform in China，we should start from the overall goals of the Chinese dream of great rejuvenation，taking into account the purposes of central and local governments’fiscal revenues，the relationship between consumption tax and the entire tax sys-tem，environmental governance and tax burden fairness，economic development and social stability，the short-term and long-term effects，as well as the people’s awareness of tax paying and environmental protection.

First，adhere to the basic tax revenue ideas of Marx.In China，there is a thought that completely negates the tax revenue ideas of Marx，which is dangerous.As socialist China，we must adhere to Marx’s basic tax revenue ideas.Sun Fei（2006）believed that the construction of socialist tax ideas with Chinese characteristics must be guided by the thoughts of Marx.To adapt to the current development of ecological civilization construction，we must establish the tax principles suitable for the situation of our country while improving the economic fairness and social justice of tax revenue.

Second，give equal consideration to the multiple development goals.Consumption tax reform especially the green tax embodies a number of goals.Multiple aspects should be covered in the target selection of reform.It is not only necessary to achieve the basic objectives of the financial revenue organization，but also to promote energy saving and emission reduction，rational consumption，the tax target connection after replacing the business tax with a valueadded tax as well as the overall tax system construction that may be added in the future.

Third，adhere to the digestion and absorption of the tax policies in developed countries rather than mechanical application.Although the green system construction of consumption tax in Western developed countries is relatively perfect，it is not to be used directly.The idea of“bringism”is reflected in the views of many scholars，which method is simple but harmful to China.We believe that China’s situation must be taken into consideration in the reform.The most important are the actual gaps between East and West，between urban and rural areas.Therefore，the consumption tax reform should take full account of the affordability and relative fairness of people in different regions.

Finally，adhere to the doctrine of“feeling the stones to cross the river”to make a gradual soft landing.Consumption tax reform can not be achieved overnight.Instead，it should be advanced based on the stage of economic development and opportunity.We should do systematic research from the aspects of tax range，tax rate and tax collection.Make a step-by-step recycling advance on the basis of full demonstration and extensive solicitation of opinions，especially the people’s views.We can not reform for reform and then hurt the interests of the people and damage the image of China.

Ⅳ.Policy orientation of consumption tax reform in ecological civilization

1.Building a reasonable green tax system

First，do necessary adjustments to the collection of consumption tax.One is to adjust the important industries’policies combined with the needs of na-tional construction of ecological civilization.The new and taxable products and acts should be incorporated into the tax items.Second，do adjustment combined with the current consumption level and structure of urban and rural residents.For example，some consumer good was a luxury in the past but becomes a necessity of life now，which should be excluded and thus the consumer surplus can be increased.

Second，the consumption tax should be considered within the entire tax system.Now our country has not yet to levy on pollution products and scarce resources，but they are possible to be improved in the future.Therefore，Chen Xi（2011）pointed out that the setting of consumption tax should be coordinated with the entirety.It should not be“off-side”as well as vacant.

Third，transform the government functions to support the construction of a reasonable consumption tax system.First，to coordinate the relationship between the market and the government，weakening economic intervention and emphasizing public services.Second，to increase the force of tax collection，to replenish the new payment method according to the new tax avoidance means.Such as levy related taxes on electronic commerce to avoid the tax avoidance behavior in sales section.Third，the consumption tax should be set to reflect the state’s intention of ecological civilization and the green industry should be given tax preferences.

2.Adjustment of the scope of consumption tax

To gradually adjust the scope of taxation according to the need of ecological civilization construction，the first is to add tax items for some high pollution products（such as battery，ozone depleting substances，plastic bags，chemical fertilizer，disposable tableware），high energy products （coal）and high-end consumer goods （high-grade leather，mink coat，private aircraft）combined with China’s actual situation and the international experience.Those items should not be set in one step but to be gradually added.Second，set up some tax items combined with the stage goals of China’s construction of ecological civilization such as the tax on the governance of water，air and other aspects.Third，adjust unsuitable tax items in industrial structure upgrading.The taxes that lack consumer oriented role and have no effect on the protection of the environment should be deleted.

3.Selection of the consumption tax links and means to calculate tax

At present，there are heated discussions of consumption tax links and means to calculate tax in the academic world.There are two views in the aspect of consumption tax links.One view holds that the retail tax should be levied to increase the consumers’“tax burden”，which embodies the spirit of“sumptuary taxation”.The other believes that the consumers’burden should be reduced and put into the process of production，wholesale and import.The means of cal-culating tax were traditionally levied within the price.Some scholars advocate the taxes to be excluded in price，which would be more intuitive and easy to adjust the consumption behavior of consumers.We believe that the specific items should be given concrete analysis rather than a single rule.It is not only a need to increase the tax burden of consumers and to guide and regulate their consumption tendency，but also to reduce the cost of tax collection and improve the efficiency of tax collection.However，the transparency of consumption tax should be increased.The consumers need to have a clear idea of the amount of tax that should be paid for certain products，which embodies the consumer’s right of information.

4.Optimization of consumption tax rate design

The unreasonable consumption tax rate is currently the most criticized aspect.Jin Kai（2013），Deng Meizhen （2014），Huang Jing （2014），and Guan Aimin（2015）proposed that China’s consumption tax rate design needs to be optimized at present.The consumption tax rate is unified because it belongs to the national tax.China now adopts a combined rate of fixation and proportion.Although there are different rates for taxable consumer goods of different nature and price levels，there are still some problems needing to be further optimized.First，increase the differences between tax rates.Second，increase the tax rate of industries，products and consumers’behavior that are closely related to ecological civilization construction.Third，formulate a district division of the tax rate for residents of different regions according to their income and consumption situations.Last，formulate different tax rates for different industry characteristics，such as monopoly and restrict industries.

（Translated by Liu Yanzi）

Notes：

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