Income composition inequality of Chinese residents and fiscal redistribution effect: An empirical analysis on individual income tax and transfer system.

Based on the data of China Family Panel Studies (CFPS), this paper decomposed Chinese residents' income into labor income and capital income by income source, and measured the income inequality and income composition inequality of Chinese residents during 2010-2018. We take the Gini coefficient as a measure of inequality and, by decomposing it by income source, analyze the absolute and relative marginal effects of capital income and labor income on the overall income inequality. On this basis, this paper discusses the redistributive effect of financial instruments such as personal income tax and transfer payment on income inequality and income composition inequality. The results show that capital income is not only the main driving factor for the increase of overall income inequality, but also its influence on inequality is gradually increasing. The results of the redistribution effect of fiscal instruments show that although individual income tax and transfer payment both help to reduce the overall income inequality, only individual income tax can reduce the inequality of income composition, while transfer payment will exacerbate it. In the background of the rising share of capital income, it may widen the income distribution gap in the long run. Hence, future fiscal redistribution efforts should consider the income composition inequality. This includes further promotion of individual income tax reforms, optimization of the tax rate structure, enhancement of relevant tax laws governing capital income like property income, and continuous improvement in the redistributive impact of fiscal instruments.

Does digital economy strengthen the income distribution effect of fiscal expenditure? Evidence from China.

The exponential growth of China's digital economy has exerted a profound influence on economic advancement and income distribution. To effectively tackle income inequality, it is essential to incorporate the analysis of digital economy development within the framework of fiscal expenditure. This study utilizes a comprehensive panel dataset encompassing 276 cities in China during the period from 2011 to 2020. Employing the fixed-effect model and instrumental variable method, the research investigates the influence of fiscal expenditure on the income gap while investigating the moderating effect of the digital economy. The key findings of the study can be summarized as follows: (1) In general, fiscal expenditure demonstrates a propensity to reduce the income gap. (2) Different categories of fiscal expenditure exhibit distinct effects on the income gap. Social security and employment expenditures do not significantly alleviate the income gap. Conversely, education expenditures and health expenditures tend to exacerbate the income gap. On the other hand, expenditures in agriculture, forestry, and water resources, as well as urban and rural affairs, effectively narrow the income gap. (3) The development of the digital economy enhances the capacity of fiscal expenditure to adjust income distribution, showcasing non-linear effects. From a fiscal expenditure classification perspective, the digital economy primarily enhances the effectiveness of income distribution adjustment for expenditures in sectors such as agriculture, forestry, water resources, and others. Based on these findings, this study proposes a set of future measures aimed at facilitating China's efforts to reduce the income gap within the framework of the digital economy. These measures encompass expediting the integration of the digital economy with government governance and advocating for the widespread adoption of digital government affairs platforms. By implementing these measures, China can gain valuable insights into effectively addressing income inequality and promoting more equitable economic outcomes within the context of the digital economy.

The Impact of Intermediate Goods Imports on Energy Efficiency: Empirical Evidence from Chinese Cities.

Improving energy efficiency is a critical way to solve energy shortage and environmental problems and achieve the goal of "double carbon". As China expands imports and integrates into global value chains, can import trade improve energy efficiency? This topic is extremely important for solving current energy problems and promoting sustainable economic development. Based on panel data of prefecture-level cities in China, this paper uses the Super-SBM model to measure the total factor energy efficiency of cities and investigates the impact of intermediate goods imports on energy efficiency with fixed effects models and instrumental variable method (IV). The study finds that: (1) intermediate goods imports contribute to the increase of urban energy efficiency, and the mechanism test indicates that intermediate goods imports affect energy efficiency through the technology spillover effect and intermediate goods type diversification effect. (2) According to the heterogeneity analysis, the effect of intermediate goods imports on energy efficiency is more evident in eastern China and cities with low topographic relief, medium population scale, and high absorption capability. (3) Analysis of the spatial spillover effect with the SDM model shows that importing intermediate goods promotes energy efficiency in local cities and radiates energy efficiency improvement in neighboring cities.