Tax Preference Policy Of The Western Sustainable Development

Due to its extensive, direct, and effective adjustment to macro economy, tax preference policy usually plays an irreplaceable role in improving the investment environment of underdeveloped regions, attracting foreign capitals, and driving regional economic growths. Tax preference policy is a usual stimulating measure in tax system. China has carried out tax preference policy since its reform and opening of economy. Now, in order to support the western development, government adopts special policies such as "tax preference". While playing an important role, this policy has also brought some problems. Therefore, proper evaluation of the tax preference policy based on theoretical analysis is urgently needed. Since the tax reform in 1994, there have many disputes on the theories of tax preference policy. Most scholars insist that the real effect of tax preference policy is uncertain, due to its intrinsic problems.This paper is intended to develop a more proper evaluation to the tax preference system, which is devoted to promote the sustainable development in western areas. At First, it defines tax preference policy and tax stimulating mechanism. After that, the paper makes a cost-efficiency analysis on the utility of tax preference policy in stimulating economic growth. And then the author puts forward the necessary conditions to carry out a tax preference policy from the experiences of China's and other countries' economic growth. At last, the author gives some suggestions of how to use tax preference policy in western development.Based on above demonstrations, the author concludes that even if the tax preference policy can improve rapidly a region's soft environment for investment, it's just a primary requirement of its development. However, it is still necessary at present for us to adopt tax preference policy to a certain extent and its function to promote economic growth can only be fulfilled conditionally. The key point is whether the central and subnational governments could make out proper tax preference policies and replace them in time with government transfer payments.