So how to do some economic welfare analysis on the export tax rebate issue? I have not done any research on this, but I once used this as an exercise for my undergraduate classmates who were teaching assistants. If the exports of products from other countries in the world are burdened with tariffs and the value-added tax of the importing country (for example, 17), and China's exports are burdened with import tariffs plus the value-added tax of both countries (that is 34, if the exporter only includes tax on the raw material part , it will be lower), China is equivalent to increasing its own export tariff by 17%. So the welfare analysis of eliminating export tax rebates and the welfare analysis of imposing export tariffs are actually the same. Welfare analysis of import tariffs is covered in general textbooks, so the example of taxing exports is a good review. The answer is simple. If we analyze small countries, after the export tax rebate is cancelled, consumer surplus increases and producer surplus decreases. Comparing the two, the producer surplus loss is greater, but the reduction in government expenditure is an increase in welfare. Overall, there will be a net loss of welfare. (It’s just two small triangles on the picture). If we analyze major countries, another benefit is the terms of trade. The cancellation of export tax rebates will theoretically improve the terms of trade. I have not seen this mentioned by those who advocate the cancellation of tax rebates. It seems that it should be one of their arguments. However, the gains from this trade terms are very small and can basically be ignored, because our other trade competitors all offer tax rebates, and most of our products have high elasticity of substitution, so it is impossible to raise prices in the international market. Therefore, in this case, there is no difference between the results of big country analysis and small country analysis. There will be a net loss of welfare.
The welfare mentioned above is only the so-called static overall net welfare analysis, not Pareto, and does not consider distribution issues or dynamic considerations. If the academic discussion could truly maintain a consistent applied theory based on understanding the basic facts, the discussion could be very interesting, but the reality is just the opposite.