A Correlation Study On State Taxation And Economic Growth In Wulian County

The relationship between taxation and economic growth is an important topic in economics. As the main body of state revenues, tax revenue is both the economic base to maintain the effective functioning of the country, but also an effective means of national economic regulation. Economy determines tax, and tax reacts to economy. Specifically, economic growth in the size, speed, quality, structure determines the total tax revenues, growth rate and tax structure.Taxation, an important means of regulation, impacts on economic growth in many aspects, such as investment, consumption, distribution and industrial structure adjustment, by tax rates, tax bearing, tax incentives, etc. The relevance of taxation and economic growth has always been one of the focus in the financial and tax areas of the relevant government departments, which also have massive empirical studies on this issue. However, most of these studies take China or a certain type of economic entity as the study sample, empirical analysis is rarely carried out devoted to a certain region, thus few practical experiences are available in this area.Taking Wulian County as the case, this paper attempts to make efforts in this regard. Through the utilization of relevant economic theory, and emphatically combine with empirical research methods, this paper uses the relevant data of WuLian County to conduct an empirical study on the relevance of local economic growth and national taxation, explains the causes for the growth in the national tax revenues has long been lower than the economic growth of the county in recent years, and puts forward relevant policy recommendations to enrich the empirical evidence, and provides reference for the objectives of economy and taxation development of the Twelfth Five-year Program of the county.This paper is divided into four parts. First, introduces the general theory of taxation and economic growth, including the meaning, nature, characteristics of taxation and economic growth, and also the theoretical analysis of their relationship and introduction of their models. The second part carries on the empirical analysis of the development of economy and state tax revenue of the county during the nine-year period2001to2009. By analyzing GDP and the development of tertiary industries, it concludes that though the county’s economic adjustment of industrial structure has been optimized gradually, but there is still much room for improvement. Analyzing the taxation performance in categories of items, grades and industries, gives the result that revenues in the second industrial organization hold a dominant position in the state tax revenues, and the state tax revenue generated by the tertiary industry grows obviously faster than that of the secondary industry, with a rising proportion each year. The third part, based on the second part, studies the correlation between state taxation and economic growth in the county. Using these nine years data, and focusing on analyzing the correlation between tax revenue and GDP, and the relationship between tax revenue and elasticity and between tax Factors and tax burden, it concludes that the county’s tax revenue and GDP are highly correlated. And on this basis, this part analyses main problems existing in the county concerning the correlation between tax revenue and economic growth. At the end, it proposes countermeasures to promote the harmonious development of tax revenue and economic growth. And for the problems and obstacles existing in aspects of tax elasticity, industrial structure, coordination, tax source development, it makes operable recommendations, including promoting the upgrading of industrial structure, enterprise scale and enterprise structure, and changing the structure of tax sources, and improving tax efficiency, and optimizing fair and sound international financial tax environment, and perfecting tax revenue inspection system to strengthen the supervision and improve the quality of tax administration.In the twelfth-five-year period, the county’s economy economy will enter a fast stable development phase. By optimizing the tax environment, improving structure of the tax sources, promoting industrial upgrading and improving the quality of tax administration, taxationas the foremost influencing factor of economic growth is bound to play a positive role in the stable and sustainable development of the county’s economy.