Glamor Economics

Chapter 91

Chapter 13 How the Country Spends Its Money—Fiscal Policy

Section 1. Understanding the Government's Purse - National Finances

Since 2000, my country's rural tax and fee reform has implemented the policy of "three cancellations, two adjustments, and one reform". "Three cancellations" means canceling government-managed funds and fund-raising that are specifically levied on farmers, such as overall planning fees and rural education fundraising, canceling slaughter tax, canceling rural labor accumulation workers and volunteer workers; "two adjustments" mean adjusting agricultural tax policies , to adjust the agricultural special product tax policy; "one reform" is to reform the method of collection and use of village reserves.With the implementation of the aforementioned rural tax and fee reform policies, the burden on farmers has dropped significantly.Since 2004, my country's rural tax and fee reform has entered a new stage, implementing the "three cancellations" policy, that is, canceling the tax on agricultural specialties other than tobacco leaves, canceling the agricultural tax, and canceling the animal husbandry tax.

For the governments of counties and townships with financial difficulties, increase county and township tax revenues, increase incentives for provincial and municipal governments to increase financial transfer payments for counties with financial difficulties, reward county and township governments for streamlining institutions and personnel, and give financial rewards for major grain-producing counties , to provide subsidies to areas that have done a good job in alleviating the financial difficulties of counties and townships. In 2005, the central government invested about 150 billion yuan in implementing the above policies, and in 2006 it invested 210 billion yuan. This has played a positive role in alleviating the difficulties at the grassroots level in counties and townships.

These are the national finances.National finance refers to the activities that the country participates in the distribution of national income by virtue of the power of the regime in order to maintain its existence and realize its social management functions.State fiscal revenue and expenditure include fiscal revenue and fiscal expenditure.my country's fiscal revenue includes two parts: budgetary revenue and extrabudgetary revenue.In the early days of the founding of the People's Republic of China, the national finance was established in an extremely difficult economic environment. Compared with before the Anti-Japanese War in 1949, the agricultural output value dropped by more than 3200%, and the industrial output value dropped by more than half; tens of thousands of kilometers of railway lines and more than [-] bridges were severely damaged, and Jinpu, Jinghan, Yuehan, Longhai and Zhejiang Jiangxi were severely damaged. Almost none of the main trunk lines can be fully opened to traffic; hyperinflation and huge investment capital have exacerbated price fluctuations and shortages of supplies.All this made the new China's finances face an extremely difficult situation. The national fiscal revenue was far from meeting the needs of fiscal expenditures, and the deficit was extremely serious.

After the founding of New China, the government adopted a series of policies to stimulate economic development. By 1952, during the three-year economic recovery period, the total fiscal revenue of New China was 361.07 billion yuan, the total expenditure was 362.19 billion yuan; the capital construction expenditure was 86.21 billion yuan , accounting for 23.8% of the total fiscal expenditure in the three years; investment in economic construction, investment in culture, education, health sciences, and social relief accounted for 40.5% of the total fiscal expenditure in the three years.These investments have consolidated and expanded the leading position of the state-owned economy in the national economy, and also expanded the proportion of the state-owned economy in providing fiscal revenue to the state. In 1950, the state-owned economy provided 21.75 billion yuan of fiscal revenue to the state, accounting for 35% of the total fiscal revenue; in 1951, it provided 59.74 billion yuan, accounting for 47.8% of the total fiscal revenue; 1952% of income.The proportion of the state-owned economy turned over to the state's fiscal revenue has increased, further consolidating the state's financial foundation.

[links to related words]

Budget revenue refers to the funds at the disposal of the state raised in a planned manner through certain forms and procedures within the budget year, and is the financial guarantee for the realization of state functions.The basic forms of my country's budgetary revenue include: taxes, turned over profits, fees and public bonds.

Budget expenditure Budget expenditure refers to the expenditure arranged by the state for the planned allocation and use of centralized budget revenue.Budgetary expenditures include: economic construction expenditures; education, science, culture, health, sports and other undertaking development expenditures; state management expenditures; national defense expenditures; various subsidy expenditures and other expenditures.Extra-budgetary expenditure refers to the expenditure of fiscal extra-budgetary funds, such as the expenditure of that part of fiscal funds that are managed and used by localities, various departments, and units themselves and are not included in the national budget.

Extra-budgetary funds In addition to budgetary revenue, in accordance with the provisions of my country's financial management system, some localities, departments, and units are not included in the national budget, and some fiscal funds that are managed and used by themselves are called extra-budgetary funds, such as various additional and other funds. Fund income not included in the budget, etc.These funds are a supplement to the state budget funds, an important part of the source of state financial funds, and also the state's fiscal revenue.

(End of this chapter)