Research On The Reasonable Limits Of Tax Regulation In China

On the basis of comprehensive analysis of domestic and international economic situation,The Governance of China puts forward the ideas of economic development in the future period: developing steadily,reforming and innovating,and improving people’s livelihood.Developing steadily refers to the sustained and healthy development of economy,reforming and innovating refers to the overall deepening of reform,and improving people’s livelihood refers to the general improvement of people’s living standards and quality.Tax regulation is an important economic means of national macro-control.The Governance of China endows the tax regulation with specific regulatory functions in a specific period.Tax regulation is restricted by the level of economic development,fiscal revenue and expenditure,tax system and other aspects,in order to prevent tax regulation from being ineffective or excessive,and avoid the possible risks of tax regulation,this paper studies the reasonable limits of tax regulation.The implementation of tax regulation is mainly carried out through total adjustment,structural adjustment and individual adjustment.Specifically,tax regulation is carried out through macro tax burden,tax structure and tax expenditure.These three aspects are the three dimensions of tax regulation.They interact and integrate with each other to form a policy synergy that affects economic growth.This paper studies the reasonable limits of these three dimensions.The reasonable limits of tax regulation have certain measurement standards.First,economic standards.Tax regulation should serve the sustainable and healthy development of the economy on the basis of the current economic situation,the core of which lies in the harmonious unification of tax regulation and productivity development.Second,financial standards.Fiscal function is the basic function of taxation.Taxation can not only meet the state’s necessary financial expenditure,but also can not levy excessive tax,which hinders the sustained,stable and healthy development of national economic.That is to say,the so-called "Taking appropriate measures without hurting the people".Third,social standards.Tax regulation can produce positive external effects on society.If tax regulation can not produce positive social effects,then tax regulation can not be considered effective.The general standard is applied to the three dimensions of macro tax burden,tax structure and tax expenditure,forming a specific criterion.Under the specific standards,this paper studies the reasonable limits of tax regulation from two aspects of quality and quantity.On the one hand,the theoretical significance of this paper lies in: firstly,the scientific positioning of tax regulation.Tax regulation is not omnipotent,so it should not be entrusted with unacceptable tasks;secondly,standardizing tax regulation mechanism.The certainty and flexibility of tax regulation are combined;thirdly,improving the tax system.The reasonable limit of tax regulation provides feasible suggestions for tax system optimization.The practical significance of this paper lies in: serving the structural reform of supply-side.The reasonable limits of tax regulation can determine the space of tax reduction,optimize tax structure and restrain tax expenditure.The reasonable limits of tax regulation,which serve the development of national economy,are the "promoter" of the structural reform of supply-side;Guarding against the risk,the grasp of the "degree" of tax regulation can effectively prevent financial risk and twist risk;The reasonable limits of tax regulation can reflect the economic operation and give suggestions for the next policy.The research ideas of this paper are as follows: Firstly,it analyses the theoretical basis of tax regulation,and then studies the reasonable limits of macro tax burden,tax structure and tax expenditure.The research ideas of each dimension are as follows: first,it analyzes the current situation and puts forward the existing problems.Second,the domestic situation compares with developed countries and developing countries,and to find out the gap.Third,on the basis of drawing lessons from foreign experience,basing on the current situation and problems of tax regulation,the paper proposes the reasonable limits of tax regulation.Finally,on account of reasonable limits,the paper puts forward policy recommendations for tax regulation.The paper is structured in "Theoretical Analysis-Empirical Analysis-Policy Suggestion" logical path.The analysis methods include normative analysis,empirical analysis and comparative analysis.This paper is divided into seven chapters and three parts,one to three chapters for theoretical analysis,four to six chapters for empirical analysis,the seventh chapter for the policy suggestion.Chapter 1 is the introduction,which mainly elaborates the research background,research significance,concept definition,research ideas,structural arrangement,research methods,technological path,key points,difficulties,innovation points and deficiencies.It also determines the theme,thoughts and basic framework of this paper.Chapter 2 is literature review.Firstly,it introduces the theory of tax regulation which includes the main schools of western economics and the domestic literature.Secondly,it summarizes literature on reasonable range of macro-tax burden,optimization model of tax structure and reasonable restriction of tax expenditure.Finally,it summarizes literature on tax policy.Based on literature review analysis,it is found that there are fewer studies on the reasonable limits of tax regulation.Most of the existing literature is based on the theoretical level,and there are few quantitative studies,which provides the direction for further study of the reasonable limits of tax regulation.Chapter 3 is theoretical analysis of tax regulation.Firstly,it introduces the theoretical basis of tax regulation: social reproduction theory,market failure theory,risk control theory and the Governance of China.Then it introduces the economic effects of tax regulation from macro and micro levels,and points out that there are some limits in tax regulation.Finally,it defines the reasonable limits of tax regulation.Chapter 4 is the analysis on reasonable range of China’s macro-tax burden.Firstly,this chapter introduces the statistical caliber and influencing factors of macro-tax burden.Then it analyses the current situation of macro tax burden and makes an international comparison.On the basis of Barrow model,using Ramsey-Cass-Koopman model and Cobb-Douglas production function,we estimate the optimal macro-tax burden in China.Finally,we find the best balance between deficit,debt and economic growth,and discuss the maximum deficit rate,the difference between the maximum deficit rate and the actual deficit rate,which are all used for tax reduction.The lower limit of macro-tax burden is obtained,and the optimal macro-tax burden is the upper limit.At last,we get the reasonable range of macro-tax burden.Chapter 5 is the analysis on reasonable mode of China’s tax structure.This chapter introduces the hierarchy and quantitative standards of tax structure,then analyses the current situation of tax structure,puts forward the existing problems,and makes international comparisons from two aspects: combination mode and relative position.Then,it analyses the impact path of macro tax burden and tax system structure on economic growth by means of PVAR.It empirically analyses the impact of tax structure on economic growth and industrial structure by means of instrumental variable method,and obtains the direction of tax structure.Finally,according to the above analysis,the optimization model of tax structure is put forward.Chapter 6 is the analysis on reasonable restriction of China’s tax expenditure.Firstly,this chapter introduces the mechanism of tax expenditure,then analyses the current situation of tax expenditure in China,puts forward the existing problems,and then summarizes the international experience.Finally,according to the above analysis,it is proposed that reasonable restraint of tax expenditure should define the scope of tax expenditure firstly,control the scale of tax expenditure,and then determine the structure of tax expenditure.Chapter 7 is the policy suggestion on reasonable limits of tax regulation in China.Based on the conclusions of the previous chapters,this chapter puts forward the overall design and policy recommendations of tax regulation.First,the macro tax burden moderately should be reduced.The country should continue to promote the tax reduction policy in the structural reform of the supply side and standardize the management of non-tax revenue.Second,the tax structure should be optimized.The country should continue to reduce the proportion of value-added tax,increase the proportion of consumption tax,improve corporate income tax,reform individual income tax,change social insurance fee into tax,and levy real estate tax.Thirdly,tax expenditure report should be prepared.The contents include the purpose,scope,cost estimation,performance evaluation and the management model.The innovations of this paper could be:Firstly,the paper carries out the idea of The Governance of China and studies the reasonable limits of tax regulation on the perspective of risk control.The Governance of China provides the direction of tax regulation.Firstly,China is in the structural reform period.The improvement of economic quality will bring about the decline of economic growth.At the same time,the tax burden on enterprises is too heavy to inject vitality into the market.Under these circumstances,tax reduction is proposed,which puts forward the requirement of tax structure and macro tax burden.Secondly,the important issues of current economy,such as structural transformation,innovation-driven,improvement of people’s livelihood and so on,which puts forward the requirement of tax expenditure.The report of the 19 th CPC National Congress points out that it is necessary to consciously guard against all kinds of risks,enhance the ability to control risks,and improve the risk prevention mechanism in all aspects.This paper studies the reasonable limits of tax regulation from the perspective of risk control,which can ensure the effectiveness of tax regulation and avoid the risks that tax regulation may bring.Second,this paper estimates the reasonable range of macro tax burden,which can service the policy of tax reduction.Based on the improved Barrow model,this paper calculates the optimal level of macro tax burden,which is the upper limit of the reasonable range.Considering the relationship among the deficit rate,the debt rate and economic growth rate,the paper calculates the lower limit of the reasonable range.Based on the current situation,it is found that the macro level is high,and tax reduction measures should be taken.This conclusion is consistent with the current policy.The difference between the actual macro tax burden rate and the reasonable lower limit of the interval is multiplied by GDP,and the maximum tax reduction scale can be obtained.This provides a reference for China’s current tax reduction policy,which is beneficial for our government to control tax reduction space and use tax regulation reasonably.Thirdly,it demonstrates the adjustment direction of tax structure with empirical analysis.Using PVAR,this paper analyzes the impact path of macro tax burden and tax structure on economic growth.The empirical conclusion is that increasing the proportion of direct tax and the decline of macro tax burden will promote economic growth.Using IV,this paper analyzes the impact of tax structure on economic growth and industrial structure.The conclusion is that reducing the proportion of VAT,business tax and personal income is conducive to economic growth and industrial structure,and excise tax and corporate income tax have no significant impact on economic growth and industrial structure.These conclusions put forward to the direction of tax structure in China.Fourth,forming a trinity tax control system.Macro tax burden,tax structure and tax expenditure interact and merge with each other to form a tax control system.From the perspective of the government,the government adjusts tax structure,which reflects the universality and certainty.The government exempts special taxpayers through tax expenditure,reflecting particularity and flexibility.Combining universality with particularity,certainty with flexibility,the result shows the level of macro tax burden.The macro tax burden is counterproductive to the tax structure and tax expenditure.The macro tax burden affects the economic growth mode,which in turn affects the tax structure and affects the scale,direction and focus of tax expenditure.This paper studies the reasonable limits of these three dimensions from the perspective of risk control,aiming at bringing policy synergy and forming a trinity tax control system.