On The Neutral Theory And Practice Of The Tax

Every nation of the world has to face the period of the economic prosperity and the period of the economic recession. Then the government should use various kinds of economic levers to result the economic problems and to explore the economic potential. Tax system is one of the important economic levers. Many economists research the theory of tax system just wants to explore an optimum taxation obtain the maximum economic result at minimum tax costs.The research of tax neutrality will be helpful to establish the optimum taxation. Particularly, to China, with the deepening of the reform of the socialist market economy and the speeding up the restructuring of economic systems, establish the neutral taxation is one of the key links. So, theoretically or practically, the research of tax neutrality theory will be significant from all respects.The paper includes six chapters. The first chapter is the outline of tax neutrality theory, introduces the summarization, the course of history and the significant of the proposition and the academic contribution. The second chapter is about the basic academic research of the tax neutrality. The third chapter discusses the macroeconomic effects and the practices of the tax neutrality policies. The fourth chapter is about the tax neutral legislation practices. The fifth chapter analysis the neutral taxation system practices, and compares the tax neutral reforms about the taxation system in Japan and USA. The last chapter is about the considerations to design the new round of tax reform in China.The overall targets of tax neutrality theory are forming a desirable tax system that is unified, open and high-efficient.The soul of the tax neutrality is not establishing a pure neutral taxation system but a hypo-neutral one that to correctly handle the relationship between tax neutrality and tax regulation, to promote economic structure, to be beneficial to sustainable development and to contribute to raise national competitiveness.