Research On Taxation Policy’s Role In China Economic Growth

Since the1994tax system reform, China’s economic growth and tax revenue growthhave made great speed.In2008, the U.S. financial crisis seriously affected China’seconomic development, in order to maintain the sustained and stable economicdevelopment, the Chinese government introduced a series of fiscal policy to expanddomestic demand and stimulate economic growth， Including an increase in governmentexpenditure and tax cuts and tax rebates as preferential tax policies that the Governmenthas taken. Increasing the government expenditure can be effective to stimulate domesticdemand, however, because of the limited government revenue; it can’t have Long-termwork. While the tax policies can play the greater role of the strategic significance, as wellas expanding domestic demand. Therefore, in the new environment, the study of taxpolicy to promote economic growth is importantFirst, we have an overview of the classical theory of tax revenue and increasedeconomic. The classical theory of economic growth is discussed in detail the role oftaxation in the neoclassical growth theory and economic theory of endogenous economicgrowth and lays a good theoretical basis for future empirical analysisSecondly, from relationship between the total tax revenue and economic growth, tothe one between the tax structure and economic growth, we do the theoretical analysisand empirical research about the relationship of taxes and economic growth. From theview of the total tax revenue,, the macro tax burden and economic growth is inverselyrelated to the correlation through Econometric Analysis and the growth rate of fiscalspending and economic growth is positively correlated. Financial expenditure inpromoting economic growth is greater than the inhibition of macro tax burden oneconomic growth, and because fiscal expenditures mostly from taxes, so as to increasethe macro tax burden will ultimately spur economic growth. However, the role of fiscalspending on economic growth is limited, the next stage or through tax cuts to promoteeconomic growth.In the economic growth drivers, through the establishment of the regressionequation, the macro tax burden is positively correlated to capital formation rate.Increasing macro-tax burden is promoting investment.Granger causality test results show a significant role in the export tax rebate on exports, increasing export tax rebates willstimulate the increase in exportsIn the tax structure, our turnover tax is too heavy and lead to the imbalance of themain tax model of the turnover tax and income tax, and aggravating the corporate taxburden and reducing the disposable income of the enterprise. As a result， businessspending and investment are reduced, Which are unfavorable for economic growth. Inthe main tax, proportion of value-added tax is too large, so we should broaden the taxbase and levy new taxes. This will ensure the size of the macro-tax burden and reduce thevalue-added tax restrictions on economic growth.Adjust tax policies referring to foreign experience in promoting economic growth,combined with our national conditions, at this stage, the structural tax reduction plays animportant role in economic growth.