Choice Of Tax Policy In China's Deflation

Under the situation of deflation, tax policy, as an important macro regulation method, is effective in holding back deflation and thus be helpful to the healthy and sustainable development of national economy. Therefore the issues of adopting which kind of tax policy is of vital importance in such condition. This paper hereafter is trying to explore it in a systematic.Judging by CPI (Consumer price index), China has been attacked twice since 1998. At that right time, according to the Mono-element Theory, the situation of deflation was very serve. The reason lay in Asian financial crisis, global deflation, excess of productivity and a low present consume. What's more, the application of certain tax policy is subject to its goal and transmission mechanism. For the moment , the regulation of tax 'policy is in an adverse situation with many disadvantages :low elasticity of tax > unclear effect of its regulation , imperfect tax system , obvious time tag of its methods and influences from international tax competition.Based on the analysis of deflation and the regulation of tax policy in China, the paper maintains that choices of tax policy should be based on not only a short-term changeable mechanism but also a long-term one that can automatically stab lice. Beginning with how to promote the investment, consume and export, we can find the defects of present tax policy, and moreover put forward corresponding measures to better it. The following are mainly include :to lessen the burden of fees, to regulate the turnover taxes, to integrate income taxes, to set new kinds of taxes, to reform Export Rebates. To strengthen the tax collection and the coordination of international taxation. With the background of unusual increase of tax, whether to cut taxes or not become a hot topic. Start from analyzing the connotation of tax cuts, the paper points out that it is a kind of standard act to lessen the tax burden and long-term arrangement of system, and further analyzes elements bringing about unusual increase of taxes as well as economic development owning to tax cuts. The paper also argues that the present unusual increase of taxation is not the reason for tax cuts and the latter actually cannot push the development of national economy to a large extent.