Value Added Tax And Income Distribution Research

Value added tax was born in the 1950’s, in the development of commodity economy emerged as a new tax, then value added tax was a huge success tax in France. Most countries in the world have adopted this system, developed countries except the United States regarded it as an important part of adjustment of the national economy. China’s relevant policies started introduced it gradually after the reform and opening up. Although a late start, but along with the development of this system in our economic system gradually occupy an important part.Value added tax has become the various categories of taxes in the one occupied by the largest proportion. On the other hand, China is more serious rich-poor divide, both as a whole, or distributed from the urban-rural dual structure, regional, and industry perspective differences emerged gradually widening trend. Among them, the impact of the Value added tax undoubtedly enormous. Therefore related research is clearly necessary.This thesis on the theory and the results of previous studies to Value added tax perspective of their own property, in-depth empirical research from the consumer level and the level of economic structures in order to investigate the effect of Value added tax on the income gap in China. In the paper we use a Value added tax theoretical part, the tax burden transfer theory, micro-economic theory simulation, regressive taxation results of the theoretical analysis of the implementation of the current Value added tax system and not in an optimal state. In the empirical part of this thesis, this thesis uses a VAR model chosen level of economic development, industrial structure, the difference between the price level, the ownership structure of the four factors that examine its relationship with the Value added tax burden by the impulse response function analysis, variance decomposition analysis of our results of changes in the Value added tax and per capita disposable income of the representative of the level of economic development more relevant. After the draw relevant conclusions, in the second part of the empirical, based on different household expenditure elasticity for commodities and the corresponding Value added tax rate come to different income groups the proportion of the size of the Value added tax burden, and is measured by the suits index. Through the relevant comparison, the paper come to our Value added tax system is caused by the widening income gap is an important reason, at present there is a certain degree of this tax regressive. Finally, the existence of the status quo of China’s current Value added tax regressive policy recommendations are given. Reduced Value added tax rate low elasticity of merchandise, and a corresponding increase in the Value added tax rate highly elastic commodity, while expanding the tax base and improve small-scale Value added tax taxpayers management is an ideal solution. At present, most studies focus on the impact of excise taxes on income distribution, while less relevant from the perspective of the analysis of Value added tax, which is one of the major innovation of this paper.