An Analysis Of The Impact Of Underground Economy On Tax Policy Effect

Underground economy is a general term for various economic activities, which are in the official statistics and supervision of the state. Underground economy is not an official activity, but it has a profound impact on China’s economic system, and with the development of economy, it will continue to be a part of the economy of our country. Because of the existence of the underground economy, the policy makers difficult for the actual changes in economic variables for observation and grasp and effect of the policy probably does not produce desired effect, even will seriously interfere with the economic operation, visible underground economy probably will make policy implementation results in a certain extent deviate from the policy makers in mind, even may produce the opposite effect. At present, in the time of economic calculation is commonly used to a tool is the CGE model, you can calculate the general equilibrium model. This kind of model can make a relatively complete analysis to the current economic system to a certain extent, it is a common method of analysis in the academic field, and has been widely used in many countries.The fully absorb the results of previous studies based on, from the actual situation of our country of trying to build in line with the current situation of economic development of our country’s underground economy CGE model, simulated underground economy exists for the impact of tax policy, in order to provide tools for simulation and prediction and analysis, improve the level of the government’s scientific decision-making. Therefore, it is very necessary and practical to analyze the influence of underground economy on economic policy from the angle of quantitative analysis.The structure of this paper is as follows: the first chapter is the introduction. Mainly introduces the research background and significance, domestic and international research on the underground economy and CGE model development trends and the main research content, research methods, innovation and deficiencies, etc. The second chapter mainly expounds the basic theory of the underground economy and status quo in China, mainly introduces the underground economy concept, classification, characteristics and in China the status, in order to pave the way for the following structure of underground economy CGE model. The third chapter is the research on the theoretical basis of CGE model. Origin of CGE model in western economics Walrasian general equilibrium theory is by abstract Walrasian general equilibrium theory of evolution and on the actual economic actual model. CGE model is usually mathematical simulations of an economy, which reflects the economy is how to achieve a balance of supply and demand was described by the Walrasian general equilibrium theory through the adjustment of the quantity and price of goods and factors. CGE model is actually a set of equations describing the relationship between supply and demand in economic system. In the third chapter, the three section CGE model is constructed, which is based on the input output table in 2007. In the fourth chapter, we mainly introduce the construction of the three sector SAM table, which is based on the CGE model, that is, the construction of the social accounting matrix, and the related parameters in the model. The fifth chapter has been constructed in containing the underground economy CGE model based on, simulation of value-added tax from production type changed to the effects of consumption of the national economy and analysis caused by the underground economy on the macroeconomic policy. In considering the present into the underground economy of value-added tax reform(i.e. from production type to consumption type) the GDP, industrial output, consumption, income, business income appear different degree of increase, and government revenue reduce found after the model is run. According to the results of the previous chapter, the sixth chapter puts forward policy recommendations to control and reduce the underground economy.