Research On The Effect Of The Tax Policy Reform To Chinese Economic Growth

The tax level is the core of a national tax system,and the tax structure is an important indicator between efficiency and fairness.It has been one of the important issues in the field of economics to set up reasonable tax level and efficient tax structure.It is well known that the level of tax and tax structure will have an impact on economic growth,and the existing literature research has confirmed this point.However,through the review of the literature,many past researches only setting a simple study of the impact of tax on economic growth,while ignoring the fact that,each variable in the economic system is not a single function,there is a two-way effect between the tax and economic growth.In addition,there are also quite a few scholars to attribute the simple tax system reform was tax structure change or tax level changes,and never thinking about the two change together to analyses economic growth overall.Depending on existing researches,this paper uses the panel data from the different provinces of China in 1998 to 2014,except Hong Kong SAR, Macao SAR, the Taiwan region and Tibet,and takes the method of PVAR to set up the empirical structure,at the end,the passage relies on consumption and investment to study the impact about economic growth from tax structure and tax level.Through the theoretical and empirical analysis,we can draw three conclusions: Firstly,direct taxes do not have the significantly stimulating function to economic growth,the corporate income tax plays a promoting role to economic growth,while the role of personal income tax is dim.Secondly the indirect tax can obviously promote economic growth,both value-added tax and sales tax,promote economic growth,but the function of consumption tax will weaken with time.Finally,tax growth should keep with the economic growth rate in a suitable scope,although the high level of Taxation will be beneficial to economic growth in the long run,but it will have a big negative effect at the beginning.This paper makes some suggestions depending on the result of empirical study,hoping that through this study,to provide a reference value for the future reform of the tax system.