Optimal Taxation Research - The View Of The Labor Theory Of Value

Currently the Western Theory of Optimal Taxation is receiving great interest and concern in China. Some countries, such as America and Canada have recently applied this taxation theory into practice. However, the Western Theory of Optimal Taxation has not been introduced to China systematically and comprehensively. The first part of this paper introduces the economic foundations, basic contents and existing problems of this theory. It also builds up a foundation to explore a customized Chinese Theory of Optimal Taxation.Marx's Theories of Labor Value and Surplus Value are very different from the Western Theory of Utility Value. Although Marx does not neglect taxation and finance completely in the whole system, he does not consider them in simple reproduction and expanded reproduction. The main purpose of this essay is to establish a customized Chinese Theory of Optimal Taxation by integrating Marx's Theories of Surplus Value and Reproduction with the Western Theory of Optimal Taxation.Chapter One introduces the basic concepts of the Western Theory of Optimal Taxation. It focuses on the meaning and standard of "optimal taxation", and the concepts of utility, utility function, social welfare function and excessive tax burden. It is points out that Marx's Theory of Surplus Value is advantage for analisis.Chapter Two introduces the Optimal Income Taxation. This theory mainly exists in various model forms. The chapter introduces the representative Edgeworth Model, Non-Linear Income Taxation Model and Liner Income Taxation Model. When introducing these models, the chapter focuses on the assumptions, deductions and conclusions of these models to prepare for next chapter's discussion. The chapter illustrates the limitations of this theory from the aspects of economic foundation, assumptions, deductions and conclusions of the theory.Chapter Three , introduces and evaluation the Optimal Commodity Taxation. It concisely introduces the Ramsey rule and simplifies the deduction process of the rule. Later, it explains the optimal conditions for Optimal Commodity Taxation, Optimal Commodity of Many-Person Economics, and Uniform Rate of Taxation. It points out this theory is not perfect and error-free.Chapter Four analyzes the basic concepts and basic theory of Optimal Taxation based on Marx's Theory of Surplus and Theory of Reproduction. This chapter points out that government administration is not a productive activity, but consumes Surplus Value without creating any utility value. Later, it discusses the relationships among Surplus Value, Taxation and Supplemental Invest. The chapter introduces Taxation into Marx's Reproduction Theory. It also points out the interacting relationship between two major parts of social production and the balancing conditions to realize expanded production after taking taxation into consideration.Chapter Five involves the problems of Theory of Optimal Taxation. On the basis of former analysis, this chapter specifies the balancing conditions for realizing Marx's reproduction. It integrates such factors as the organic composition of capital, the social average pre-tax profit ratio, the economic development speed and the relationship between two major parts of social production into the model. Additionally, it concludes that the setting of tax rate is influenced by the above factors. In a period of time, those variables are relatively stable, therefore the derived tax rate is also stable. The balancing conditions for expanded reproduction can not be achieved until we set the tax rate according to the above function.Chapter Six discusses the Commodity Taxation under the condition of expanded reproduction. It researches on the setting of uniform tax rate under single commodity or Double commodities and the different tax rate between two products. This chapter restates that the setting of tax rate is influenced by the organic composition of capital, the social average pre-tax profit ratio, the economic development speed and the relationship between two major parts of social producti...