The Effect Of The Tax-cut Policy In China

The international financial crisis made the Chinese economy into an unprecedent-ed predicament in 2008.To address this crisis,the Chinese government implemented the proactive fiscal policy at the rule of counter-cyclical operation.Chinese government has expanded the scale of fiscal expenditure,and put forward to a series of targeted tax-cut policies.Tax-cut policies include the VAT,the reform of the corporate income tax,the reform of the personal income tax,the reform of the resource tax,the reform of the property tax,the reforms of the travel tax and the vehicle purchase tax,and so on.The results of these tax-cut policies are positive to quick recovery and the stable development of China's economy.However,we should also pay attention to the existing problems.Firstly,from the perspective of the tax burden,the total tax revenue in the state is indeed in decline,but the macro tax burden is on an upward trend.Secondly,from the perspective of the tax-structure adjustment,many tax-cut policies are short-term and temporary measures,in addition to the VAT and the reform of the corporate income tax,which do not produce the positive effects to the optimization of the economic structure.From the long-term goal of industrial restructuring,the development of the tertiary industry is important,however,the actual result of the tax cuts is to reduce the tax burden at the primary industry and the secondary industry,and to improve the tax burden at the tertiary industry.The result is contrary to the intention of benefiting people's livelihood and restructuring.At present,although the international economic situation somewhat returns slowly and the world economy has entered a "post-crisis era",the tide of economic crisis still exists and the root causes of the crisis are unresolved or eliminated.China's economy remains uncertain.Therefore,the government needs a further domestic economic restructuring,and proposes to implement supply-side reforms to eliminate the problem of excess capacity,and continues to implement the tax-cut policy.In summary,although the tax-cut policy aims to the international financial crisis,the government,according to the economic and social development in China,adds the tasks of adjusting economic structure and promoting people's livelihood to the tax-cut policy in the time of policy formulation and implementation.The tax-cut policy should be an important issue about the therotical and empirical analysis of building the modern fiscal and taxation system.This paper argues that the main points of future tax-cut policy are reducing the tax burden on businesses and residents within the allowable range financial capacity,and preceding the sustained and stable economic development,from ways of servicing economic growth,optimizing the industrial structure,regional development,narrowing the income gap.Continuing to the tax-cut policy is an essential fiscal instrument under the"supply-side reform" and the "counter-cyclical rules".Overall,the tax-cut policy would be the essential instrument for economic development,people's livelihood and environmental protection,which has a lot of policy room and positive effects in playing effective influence in guiding industrial development and upgrading,balancing regional development,and adjusting the income gap.For this reason,this paper will study objectives and principles of tax-cut policy,analylize the effects of the present tax-cut policies from different perspectives,and explore the effective tax-cut policy to the coordinate development of the economy,the society,and the environment,at the goal of building the modern taxation system,by methods of theory and empirical analysis.I hope this paper can provide a useful reference for the decision-making of the modern taxation in China.