Tax Salience,Tax Perception And Residents' Preference Of Behavior

In their researches on tax and its social and economic effects,foreign scholars usually suppose that individuals are well informed of tax information.Hence,the individuals are not only fully aware of the genuine burden of taxes but also able to make optimal decisions accordingly.However,with the development of modern economic theories,in the 1950's,Simon criticized the classic hypothesis of Rational-Economic Man and advocated a theory of Bounded Rationality Decision.In addition,since the end of 1970's,with the emergence of Prospect Theory and the development of behavioral economics,researches by foreign scholars have further found that due to the complexity of environment and limited individual cognitive competence,individuals are not fully rational,and their preferences are not invariable.Therefore,in real social and economic life,due to the complexity of the structure of tax system and their limited cognitive competence in tax,residents are not able to be fully aware of all taxes,or make fully optimal decisions.In recent years,some foreign scholars,like Chetty et al.(2009),have proposed a theory of Tax Salience in dealing with the problem of tax underestimation on the part of tax payers.Based on the perspective of behavioral economics,they have made some theoretical and empirical researches on the social and economic effects of Tax Salience on Residents Behavior.However,existing researches on Tax Salience by foreign scholars are mainly based on tax systems in developed countries in Europe and America,and only few researches are based on the tax systems in developing countries.For this reason,this article,based on China's tax system and the status of Chinese residents' Tax Perception,as well as the existing research achievements of foreign scholars,explores the influence of Tax Salience and the degree of Tax Perception on the behavior preferences of Chinese residents.Firstly,taking Individual Income Tax and Consumption Tax as examples,this article makes an empirical analysis of the effect of Tax Salience on Residents' Consumption expenditures based on the provincial panel data of 2001-2014 in China.The studying results show that Tax Salience has an impact on Residents' Consumption Behavior.Individual Income Tax as a direct tax has a significantly negative effect on Residents' Consumption Behavior due to a relative higher level of Tax Salience.Specifically,increase of tax burden per capita of Individual Income Tax will lead to decrease of consumption expenditure per capita on average.However,Excise Tax as an indirect tax does not have a significant effect on Residents' Consumption Behavior.Due to the adoption of taxes included in the calculated prices and the fact that Excise Tax of most taxable consumer goods is mainly levied on the production link,Excise Tax has a relative lower level of Tax Salience.In addition,Tax Perception and the Tax Consciousness of current Chinese residents are generally low,which also accounts for the result.Secondly,taking the consumption of cigarette and wine as examples,this paper makes an empirical analysis of the effect of Tax Salience on the Preference of Resident's Consumption Behavior,which is with the application of the experiment of situation simulation.The studying results show that the Consumption Tax Salience has a significantly influence on Consumption Behavior of Consumers.Under the control of salary level and relative elements of consumers,the Consumption Tax Salience has a significant influence on consumers' consumption behavior of cigarette and wine.That means the propensity of consumers for reducing consumption of cigarette and wine will be stronger when Excise Tax Salience gets higher.Additionally,marginal effect estimation shows that the marginal impact of Excise Tax Salience on consumers' behavior propensity of probably and absolutely reducing cigarette and wine consumption is larger,compared with income level and other relevant variables.This means Excise Tax Salience has a significant effect on Residents' Consumption Behavior.Thirdly,according to the division of Inner Scale and External Scale of Government Scale,this paper makes an empirical analysis of the effect of Tax Perception on Residents' Preference of Government Scale,which uses the Micro-survey data.The studying results show that Tax Perception has a significant effect on Residents' Preference of Government Scale.In the case of a control on income level,education level and some other individual factors,Tax Perception has a significant effect on Government Inner Scale,which means the Residents' Preference of restrictions on Government Power Scale will be stronger when Tax Perception gets higher.Similarly,in the case of a control on income level,education level and some other individual factors,Tax Perception also has a significant effect on Government External Scale,which means the Residents' Preference of restrictions on Government Agencies and Civil Servants Scale,Administrative Expenditure Scale will be stronger when Tax Perception gets higher.Lastly,this article makes an empirical analysis of the effect of Tax Perception on Residents' Tax Compliance and Taxpaying Willingness with Micro-data,which takes Individual Income Tax as example.The studying results show that when controlling a series of factors such as income level,education level and complexity of tax system,Tax Perception has a significant impact on Residents' Tax Compliance.That means Residents' Tax Compliance will be stronger when Tax Salience gets higher.Similarly,in the case of a control on income level,education level,complexity of tax system and other factors,Tax Perception also has a significant positive impact on Taxpaying Willingness.That means Residents' Tax Willingness will be stronger when Tax Salience gets higher.However,special attention needs to be paid that the conclusions above only apply to the current specific tax environment in China.With the promotion of the reform of integration and classification of Individual Income Tax as well as the improvement of Residents' Tax Perception,the impact of Tax Perception on Residents' Tax Compliance and Taxpaying Willingness may change.