What Causes Fiscal Policy Lags?

Active fiscal policy National economic policies and macro-control measures to implement industrial policies through fiscal investment and financing. Active fiscal policy: National financial construction and infrastructure construction through fiscal investment and financing, adjustment of economic structure, guidance, promotion, and support for industrial upgrading, forming new economic growth points, promoting investment, increasing employment, expanding domestic demand, and making the country's economic balance Sustainable development. Active fiscal policy is a necessary prerequisite for stable economic development and a steady improvement in people's living standards, and is an important feature of a socialist market economy. ^[1-2]

Proactive fiscal policy

Proactive fiscal policy is achieved through fiscal investment and financing

Active fiscal policy National economic policies and macro-control measures to implement industrial policies through fiscal investment and financing. Active fiscal policy: National financial construction and infrastructure construction through fiscal investment and financing, adjustment of economic structure, guidance, promotion, and support for industrial upgrading, forming new economic growth points, promoting investment, increasing employment, expanding domestic demand, and making the country's economic balance Sustainable development. Active fiscal policy is a necessary prerequisite for stable economic development and a steady improvement in people's living standards, and is an important feature of a socialist market economy. ^[1-2]

Actively proposed and implemented by my government

Combination of investment scale and consumer demand

Market and consumer substitution

That is to say, the focus of current fiscal and monetary policies should be on areas that are conducive to further market development and stimulate final consumer demand, and gradually reduce the dependence of economic growth on expanding government investment. There are many measures to choose from in this regard, such as promoting bank consumer credit in an orderly manner; appropriately increasing the proportion of fiscal expenditure to stimulate consumer demand, especially increasing the amount of fiscal transfer expenditure to low-income people; effectively reducing the burden on farmers, Rural and peasant income, laying the foundation for opening up huge rural markets, etc.

Private and corporate investment alternatives

Social funds are always flowing and transforming into each other. In order to achieve the predetermined economic growth goals, in addition to the provision of certain social public goods and services, the government

Define fiscal policy goals

Under the general direction of active fiscal policy, the fiscal policy of 2012 presents the four characteristics of stabilizing the macro, adjusting the micro, protecting the livelihood of the people, and promoting development.

Let's start with "stable macro". The overall requirements for "stability" are to maintain the expansion of fiscal expenditures and reduce taxes on economic entities as appropriate. Therefore, the main measures for "stabilizing the macro" have two parts: First, adhere to the strength and structure of the policy. A total of 850 billion yuan of government bonds and local bonds were issued throughout the year, which effectively hedged the downward pressure on the economy. The second is to vigorously promote structural tax reduction policies to reduce the burden on enterprises and residents, including the implementation of the new personal income tax law to reduce the tax burden on low- and middle-income groups in the society; the implementation of higher value-added tax and business tax thresholds to reduce taxes for small and micro enterprises Burden policy; implement preferential tax policies for small-scale and small-profit enterprises to reduce income tax by half; carry out a pilot program of changing business tax to value-added tax and steadily expand the scope of the pilot program.

The second is "micro-tuning", which mainly completed eight major events: first, vigorously supporting independent innovation and improving the core competitiveness of the industry; second, the central government invested 176.9 billion yuan to accelerate the development of new energy, renewable energy and clean energy; third, Establish and improve the policy system for paid use and trading of pollutant discharge rights; Fourth, the central government will invest 15 billion yuan to cover the grassland ecological protection subsidy and incentive policies to all animal husbandry and semi-animal husbandry counties determined by the state; fifth, increase financial support for SMEs Implementation of tax and fee reduction policies; Sixth, vigorously support the development of strategic emerging industries and high-tech industries, promote the optimization and upgrading of traditional industries, and accelerate the development of modern service industries; seventh, implement major cultural industry project-driven strategies; eight, implement and promote regional coordination Development of various fiscal and taxation policies to improve the ability of areas in difficult areas to implement various livelihood policies.

The third is "protecting people's livelihood." The word "guarantee" has the dual meanings of protection and improvement, and is reflected in the two aspects of public service provision and residents' income growth. First, to maintain a large fiscal expenditure this year, and promote education, medical care, social security, employment, and security. Social undertakings, public culture and other social undertakings have accelerated development. The second is to increase the income of residents and enhance their spending power. Implement more active employment policies and implement the minimum wage system; expand the scale of financial subsidies and increase the income of urban and rural residents, especially low- and middle-income earners.

The fourth is "promoting development." This "progress" for promoting development and "striving for progress in stability" is a reason. During the year, China's economic scale continued to expand, and the annual economic growth rate is expected to exceed 7.8%; the economic structure continues to improve, the real economy investment accounts for more than 70% of total fixed asset investment, and high-tech enterprise investment activities account for more than half of them; The role of technological and management innovation factors in promoting economic development has risen significantly, and the contribution of economic growth provided is expected to exceed 20%.

Overall, the achievements of fiscal policy in 2012 are remarkable. Increase investment in education, basically achieve the goal of 4% of GDP of national fiscal education expenditure; accelerate the construction of the social security system, and achieve full coverage of the new rural and urban residents' social endowment insurance system; deepen the reform of the medical and health system, Raise the financial subsidy standards for new rural cooperative medical care and basic medical insurance for urban residents; solidly promote the construction of supportive housing projects and start construction of more than 7 million units; ensure that the increase in public financial investment in cultural construction is higher than the increase in fiscal regular income .

As an expansionary macro-control operation, the actual content of active fiscal policy must be implemented in three areas: increasing deficits, reducing taxes, and expanding expenditures.

Increasing the deficit is necessary because the size of the fiscal deficit and its marginal effects directly determine the magnitude of fiscal expansion. With fiscal expansion, the fiscal deficit in 2013 will increase from 2012. Combine the fiscal deficits (800 billion yuan and 270 billion yuan respectively) made up by borrowing national debt and using the central budget stabilization fund to make the total fiscal budget deficit in 2012 exceed 1 trillion yuan. Considering the economic trends in 2013 and the need to implement fiscal expansion and other aspects, it can be expected that the increase in the 2013 budget deficit should be in the hundreds of billions of yuan.

Look at tax cuts and increases. A specific amount of fiscal deficit can support tax cuts, support expansion, and support both tax reductions and expansion. This depends on grasping the intensity of aggressive fiscal policy expansion. Given the multiplier differences between taxes and expenditures, generally speaking, increasing expenditures has a larger and more direct expansion effect than reducing taxes. However, considering the current macroeconomic policy pattern that takes into account dual needs, locks on multiple goals, and weighs the pros and cons of various aspects, it can be judged that the active fiscal policy in 2013 should focus on implementing structural tax cuts.

The focus of structural tax reductions rather than the expansion of government spending is because tax reductions are mainly implemented through an increase in private disposable income rather than an increase in direct government investment. On the one hand, it helps to achieve the goal of stable growth of countercyclical adjustment; on the other hand, it helps to give more investment decision-making power to the market, to play the fundamental role of the market in resource allocation, and to avoid extensive expansion Better play the role of active fiscal policy in advancing structural adjustment. It is for this reason that in 2012, especially in the second half of 2012, structural tax cuts have become the main vehicle for active fiscal policy. In 2013, under the constraints of dual needs and multiple goals, the role of structural tax cuts in fiscal expansion will become increasingly prominent, and may even become the main factor affecting the effect of this round of macroeconomic regulation. This means that at least half or even more of the 2013 budget deficit must be used to support structural tax cuts.

Afterburner and load reduction. Fully implement the tax and fee reduction policies that have been introduced. At the same time, we will step up research on larger-scale tax reductions and more obvious fee reduction measures to truly allow enterprises to enter the market lightly and let go of development.

Make up the short board. Strongly support the construction of major projects identified by the central government, and strengthen the construction of weak links in economic and social development.

--Promote consumption. Promote the improvement of the income distribution system that is conducive to improving residents' consumption capacity, in-depth study and demonstration of policies such as the special deduction plan for personal income tax, increase residents' income, and stimulate residents' consumption potential.

Mutual use of Yumin. The government has to live a "tight life" and use the saved money to protect people's livelihood and spend it on the people. ^[3]