In Economics, What Does it Mean to Break-Even?

"Fiscal revenue and expenditure balance is the abbreviation of fiscal revenue and expenditure balance." It refers to the fiscal balance and fiscal expenditure in a certain period (usually a fiscal year), the overall balance, reasonable revenue and expenditure structure, and distribution ratio coordination. It is important for financial management in China One of the principles. There is an objective necessity to achieve fiscal balance: (1) The essence of fiscal balance is the balance between the fiscal funds raised by the state finance and the social products in its centralized control. If the two are imbalanced, or some social products are idle and wasted Or there is a deficit, part of the purchasing power of the currency without material guarantees, and inflation. Both conditions are not conducive to the healthy development of the national economy. (2) Finance and banks are the two major channels for the country to allocate funds. Fiscal balance and its The impact and constraints on credit balance are necessary conditions to ensure the coordinated development of the national economy. (3) The economy in the primary stage of socialism is a resource-constrained economy. The characteristics of fiscal operation are "tight operation", which often plagues the macroeconomic balance. Not overproduction, but aggregate demand expansion. ^[1]

Fiscal balance

Right!

"Fiscal revenue and expenditure balance is the abbreviation of fiscal revenue and expenditure balance." It refers to the fiscal balance and fiscal expenditure in a certain period (usually a fiscal year), the overall balance, reasonable revenue and expenditure structure, and distribution ratio coordination. It is important for financial management in China One of the principles. There is an objective necessity to achieve fiscal balance: (1) The essence of fiscal balance is the balance between the fiscal funds raised by the state finance and the social products in its centralized control. Or there is a deficit, part of the purchasing power of the currency without material guarantees, and inflation. Both conditions are not conducive to the healthy development of the national economy. (2) Finance and banks are the two major channels for the country to allocate funds. Fiscal balance and its The impact and constraints on credit balance are necessary conditions to ensure the coordinated development of the national economy. (3) The economy in the primary stage of socialism is a resource-constrained economy. The characteristics of fiscal operation are "tight operation", which often plagues the macroeconomic balance. Not overproduction, but aggregate demand expansion. ^[1]

Balance of payments is a period of time (usually a fiscal year)

As early as in China's slave society, there was a record of "living within the means" ("Book of Rites · King System") (see within the means to live within). During the period of liberal capitalism

In China, the most important thing is to develop the economy and increase income and reduce expenditures. In terms of budget management,

In the preparation of the budget, we must adhere to the principle of balanced income and expenditure, and live within our means. If there is a balance between income and expenditure in certain special circumstances, timely measures must be taken to increase revenue, reduce expenditures, and issue

Central and local fiscal balance

In accordance with the provisions of the Budget Law, China implements a "first-level government and first-level budget" with a total of five levels of budget. The State Council prepares the draft central budget, which is implemented after approval by the National People's Congress. Local governments at all levels compile draft budgets at this level and implement them after approval by the people's congress at the same level. Local budget revenues and expenditures are collectively referred to as local fiscal revenues and expenditures.

Taking 2008 as an example, the national fiscal revenue was 61,335.35 billion yuan, and the national fiscal expenditure was 6.259266 trillion yuan. The central government's revenue at the level of 3.268056 billion yuan, accounting for 53.3% of the national fiscal revenue; the central government's expenditure at the level of 1,344.417 billion yuan, accounting for 21.3% of national fiscal expenditure. Local revenue at the local level was 2.866497 trillion yuan, accounting for 46.7% of the national fiscal revenue; local expenditure at the local level was 4.492449 trillion yuan, accounting for 78.7% of the national fiscal expenditure. 44.8% of local expenditure.

The specific balance between central finance and local finance is:

Revenue at the central level (3,256.056 billion yuan) + revenue at the local level (94.637 billion yuan) + central fiscal deficit (180 billion yuan) + transfer to the central budget stabilization fund (110 billion yuan) = central government expenditure (13344.417 billion yuan) ) + Local tax rebate and transfer payment (2,299.076 billion yuan) + Arrangement of the central budget stabilization adjustment fund (19.2 billion yuan)

Local income at the local level (2.8649.79 billion yuan) + central government's local tax rebate and transfer payments (2.299076 billion yuan) = local local expenditure (49248.449 billion yuan) + central government expenditure (94.637 billion yuan) + local fiscal carry-over and balance (144.569 billion yuan) (see Figure 5.1 and Figure 5.2)

not difficult to see:

(1) National fiscal revenue (expenditure) = central-level revenue (expenditure) + local-level revenue (expenditure), not central fiscal revenue (expenditure) + local fiscal revenue (expenditure). This is because: the central fiscal revenue includes the revenue of the local government (the central fiscal expenditure includes the return and transfer of local tax revenue); the local fiscal revenue includes the central tax return and the transfer payment (the local fiscal expenditure includes the central government expenditure). Therefore, if the central and local fiscal revenues (expenditures) are simply added to obtain the national fiscal revenues (expenditures), double counting will occur.

(2) The central government's net tax rebates and transfer payments to local governments amounted to 22.044439 billion yuan, which is equivalent to 67.5% of central-level revenues (3,268.056 billion yuan). The form goes to local use. Therefore, we cannot simply compare the proportion of central government revenue to national fiscal revenue (53.3%) and the proportion of central government expenditure to national fiscal expenditure (21.3%). 21.3% of national fiscal expenditure. In fact, central-level revenues are not mainly used for central-level expenditures. Most of them are subsidized to local governments (mainly in the central and western regions) through tax rebates and transfer payments. Correspondingly, local fiscal revenue is formed and used to arrange local fiscal expenditures.

(3) The net tax return and transfer payments received by the local government from the central government amounted to 22,044.39 billion yuan, equivalent to 44.8% of local expenditures at the local level. Net amount. Therefore, we cannot simply compare the proportion of local revenue at the national fiscal revenue (46.7%) with the proportion of local expenditure at the national fiscal expenditure (78.7%). We believe that the local government is responsible for 46.7% of the national fiscal revenue. 78.7% of national fiscal expenditure. In fact, a significant portion of local expenditures, especially in the central and western regions, come from tax returns and transfer payments from the central government. ^[2]