Professor Chu Deyin, collaborating with his master’s student Ji Fan and Professor Liu Fengqi from the School of Economics at Nankai University, jointly published an article titled Tax Competition, Capital Flow, and Income Inequality in Economic Research Journal, No.6, 2024.

With China’s economy is shifting from rapid growth to high-quality development, the issue of income inequality among residents is related to whether China can smoothly overcome the middle-income trap and achieve the strategic goal of common prosperity. This paper, constructs a static general equilibrium model that includes representative households, representative enterprises, and local governments, systematically interpreted the mechanism and impact of local government tax competition on residents’ income inequality. Using data from 270 prefecture level cities in China, empirical analysis is conducted. The study has the following conclusion. Firstly, local government tax competition has a significant anti fair distribution effect on residents’ income inequality between regions, which mainly achieved through the transmission mechanism of capital inequality. Secondly, the reverse distribution effect of tax competition is mainly reflected in the competition of corporate income tax and individual income tax. Thirdly, the differences in economic foundation and market environment lead to significant heterogeneity in the impact of tax competition, with less developed regions and regions with average market environments having stronger incentive mechanisms for tax competition, and tax competition having a more pronounced impact on income inequality among residents in different regions. This study provides useful experience and policy references for coordinating high-quality regional economic development and promoting common prosperity.

This is the sixth consecutive year that our school has published high-level papers in this Journal, fully reflecting our continuously improving scientific research strength and academic level.