Deviation And Co-ordination Of Taxation And Optimal Tax System

GDP growth rate had dropped for 42.5% from 12.7% in 1994 to 7.3% in 2001. In contrast with it, Gini coefficient had gone up for 2.4 percent from 0.434 in 1994 to 0.458 in 2000. Is it a coincidence that the present taxation was also established in 1994?Author makes a great breakthrough in the above problem by researching the taxation reformation since 1994. Article will show that what are the principles of the past taxation reformation, and whether they are reasonable in the market economy or not. It is a conclusion that they are not compatible with the market economy.What is the optimal taxation? In the second chapter article will introduce it, reviewing its concept, principles, theory. On the basis of the above normative analysis, article set up the index system in order to the positive analysis on it.Article will go on the positive analysis on the present taxation from the points of view of equity and efficiency in the third chapter. From the angle of equity, it brings about the horizontal and vertical equity during the farmer and the citizen, the poor and the rich, the domestic and foreign enterprises, the three industry. From the angle of efficiency, it not only leads to the high imposing and ratepaying costs but also interferes with resources allocation and causes the low economic growth rate because of too many tax-rate grades, too many tax items, and unreasonable tax-rate.How to reform the present taxation It is proposed in the fourth chapter. Firstly, author brings forward the aim of the reformation that is attaching importance to equity at the same time of efficiency priority from the angles of efficiency and equity. Then author puts forward advices for the main tax items which affect the optimal taxation.Last chapter, it is a conclusion. Author thinks that the new taxation is better than the old , which is nearer to the second-best principle and equity. To the article, author thinks that it only is a start, need more improvement in theory of the optimal taxation, methodology and policy suggestion though it has come to an end.