The labor income tax equivalent of price scissors in Prereform China

Hiroyuki IMAI

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

Abstract

In a centrally planned economy, the government can raise investable resources through price and wage manipulation. By treating price and wage controls as an implicit labor income taxation, we assess the scale of resource transfers from households to the government in prereform China. The implicit tax revenue during the 1964 to 1978 period is estimated at 10.4% of GDP. This implicit tax led to implied reductions of 31.1 and 37.8%, respectively, in the price of agricultural goods and in the nonagricultural-sector nominal wage during the 15 years. The equivalent average labor income tax rates were 16.7 and 24.1% for agricultural and nonagricultural workers.J. Comp. Econom., September 2000, 28(3), pp. 524-544. Lingnan University, Tuen Mun, Hong Kong.
Original languageEnglish
Pages (from-to)524-544
Number of pages21
JournalJournal of Comparative Economics
Volume28
Issue number3
DOIs
Publication statusPublished - 1 Sep 2000

Fingerprint

Wages
China
Income tax
Labor income
Implicit taxes
Resources
Government
Income taxation
Household
Centrally planned economy
Manipulation
Tax revenues
Workers
Tax rate
Hong Kong

Keywords

  • Price scissors
  • income tax
  • price and wage controls
  • sources of investable resources
  • terms of trade

Cite this

@article{aeb2dbf93d87407ba6ccdd390968c718,
title = "The labor income tax equivalent of price scissors in Prereform China",
abstract = "In a centrally planned economy, the government can raise investable resources through price and wage manipulation. By treating price and wage controls as an implicit labor income taxation, we assess the scale of resource transfers from households to the government in prereform China. The implicit tax revenue during the 1964 to 1978 period is estimated at 10.4{\%} of GDP. This implicit tax led to implied reductions of 31.1 and 37.8{\%}, respectively, in the price of agricultural goods and in the nonagricultural-sector nominal wage during the 15 years. The equivalent average labor income tax rates were 16.7 and 24.1{\%} for agricultural and nonagricultural workers.J. Comp. Econom., September 2000, 28(3), pp. 524-544. Lingnan University, Tuen Mun, Hong Kong.",
keywords = "Price scissors, income tax, price and wage controls, sources of investable resources, terms of trade",
author = "Hiroyuki IMAI",
year = "2000",
month = "9",
day = "1",
doi = "10.1006/jcec.2000.1671",
language = "English",
volume = "28",
pages = "524--544",
journal = "Journal of Comparative Economics",
issn = "0147-5967",
publisher = "Academic Press Inc.",
number = "3",

}

The labor income tax equivalent of price scissors in Prereform China. / IMAI, Hiroyuki.

In: Journal of Comparative Economics, Vol. 28, No. 3, 01.09.2000, p. 524-544.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

TY - JOUR

T1 - The labor income tax equivalent of price scissors in Prereform China

AU - IMAI, Hiroyuki

PY - 2000/9/1

Y1 - 2000/9/1

N2 - In a centrally planned economy, the government can raise investable resources through price and wage manipulation. By treating price and wage controls as an implicit labor income taxation, we assess the scale of resource transfers from households to the government in prereform China. The implicit tax revenue during the 1964 to 1978 period is estimated at 10.4% of GDP. This implicit tax led to implied reductions of 31.1 and 37.8%, respectively, in the price of agricultural goods and in the nonagricultural-sector nominal wage during the 15 years. The equivalent average labor income tax rates were 16.7 and 24.1% for agricultural and nonagricultural workers.J. Comp. Econom., September 2000, 28(3), pp. 524-544. Lingnan University, Tuen Mun, Hong Kong.

AB - In a centrally planned economy, the government can raise investable resources through price and wage manipulation. By treating price and wage controls as an implicit labor income taxation, we assess the scale of resource transfers from households to the government in prereform China. The implicit tax revenue during the 1964 to 1978 period is estimated at 10.4% of GDP. This implicit tax led to implied reductions of 31.1 and 37.8%, respectively, in the price of agricultural goods and in the nonagricultural-sector nominal wage during the 15 years. The equivalent average labor income tax rates were 16.7 and 24.1% for agricultural and nonagricultural workers.J. Comp. Econom., September 2000, 28(3), pp. 524-544. Lingnan University, Tuen Mun, Hong Kong.

KW - Price scissors

KW - income tax

KW - price and wage controls

KW - sources of investable resources

KW - terms of trade

UR - http://commons.ln.edu.hk/sw_master/6892

U2 - 10.1006/jcec.2000.1671

DO - 10.1006/jcec.2000.1671

M3 - Journal Article (refereed)

VL - 28

SP - 524

EP - 544

JO - Journal of Comparative Economics

JF - Journal of Comparative Economics

SN - 0147-5967

IS - 3

ER -