An Empirical Study Of The Influence Of The Fixed Assets Investment On Regional Taxation In Different Areas Of China

As a main source of government revenue, taxation is an indispensable governmental conduct in market economy. As the leading role of economic development, Investment in fixed assets has an important impact on local taxation. When comes to the relationship between investment in fixed assets and taxation, researches concern the impact of taxation on investment in fixed assets in past, but neglect of the impact of investment in fixed assets on taxation. In this paper, author focuses on the impact of fixed asset investment on regional taxation, answer the question that if any significant effect investment in fixed assets of the regional taxation, the direction of this influence, the strength diversity, and its inherent reasons.This dissertation includes four parts, and is separated to five charters. The first part(chapter I) introduces what the issue is, the purpose of the study, the literature review, the research methods and contents. Focus on the relevant literature collected and involves two aspects of economics literature, one related to tax documents; the other related to the literature of investment in fixed assets. The second part (Chapter II) describes the general principles about fixed assets investment and taxation. First introduced the relationship between taxation and fixed assets investment, consumption and net exports; following are some theories, at the last of this chapter is the map fixed asset investment effect on local taxation. The third part (Chapter III) analysis status quos of the fixed assets investment and local taxation in different areas of China. Analysis size, proportion and growth rate of investment in fixed assets, consumption and local tax revenue in different areas, and do a statistical comparison of horizontal and trend. Try to have a basic knowledge about the development level of fixed asset investment and local taxation in China. The fourth part (Chapter IV, V) is the quantitative analysis part of this article. First, using panel data study the direct impact of investment in fixed assets on the local taxation in eastern, central and western areas. Comparing the elements of the impact of differences between different regions, and significant differences were deep further study. Then use path analysis reveals the indirect effects of investment in fixed assets and local tax revenue, to answer why the local government encourage investment in fixed assets.Through this research, the conclusions are as follow: First, investment in fixed assets in eastern region accounted more than 50% in China, but the share declined. Proportion of fixed asset investment in GDP are growing in all regions. Local taxation in eastern region accounted over 60% in China. Local tax burden in all regions are rising. Second, consumption, fixed investment and net exports have different effects on different regions, and differences are significant. Investment in fixed assets have small direct impartation of local taxes. Third, investment in fixed assets in various regions on the consumer all have a significant positive indirect effects, the strongest influence is the eastern region. Also found that consumption of fixed assets investment has a positive role in promoting.