Impact Of Tax Burden On China's Investment Andconsumption Structure

In the recent 20 years' of china's economic development,exists a stylized fact of coexistence of high investment growth rate and low consumption growth rate,which has a significant influence on economic stability and sustainable development.In the first half of 2016,China's GDP growth rate fell to 6.7%,and in the case of China's private investment growth further declined,the national fixed asset investment growth remained at a high level of 9%.Based on the above reality,the coordination of investment and consumption proportion and optimization of its structure,have certainly become a problem must be addressed.Tax is an important economic means used by government to adjust social investment,savings and consumption to make economy achieve equilibrium.Tax burden is one of the core problems of taxation.Different types of tax burden have different effects on investment and consumption structure.By summarizing and commenting on relevant literature both at home and abroad,this paper finds that in the study of the influencing factors of investment and consumption structure,only few scholars have studied the relationship between taxation and investment and consumption structure from the perspective of tax burden.So based on the characteristics of China's tax system,this paper studies the relationship between tax burden of different taxes and investment and consumption structure combined with the tax burden of capital and consumption.It is of great practical significance to adjust tax burden and optimize the structure of investment and consumption in China.First of all,this paper defines the core concept of tax burden and investment and consumption structure,and describes the phenomenon of China's high investment rate,low consumption rate.Then it studies the relationship between tax burden of tax base and investment and consumption structure through the establishment of theoretical model,and analyzes the impact of five main taxes on investment and consumption structure from the qualitative perspective.Theoretical analysis shows that:(1)the increase of capital average tax rate has positive impact on the ratio of investment to consumption,butthe ratio declineswhen capital average tax rate is too high.Considering the fact that China's capital average tax rate is at a high level,the ratio of investment to consumption will decline if we continue to raise the capital average tax rate;(2)the consumption average tax has positive impact on the ratio of investment to consumption;(3)the tax base of value-added tax and business tax include capital and consumption,its impact on investment and consumption structure can be positive or negative,mainly depends on the intensity of taxation on capital and consumption;(4)the tax base of consumption tax is consumption,taxation will increase the ratio of investment to consumption;(5)the tax base of corporate income tax is capital,taxation will suppress investment,but does not directly affect consumption,lower the ratio of investment to consumption;(6)the tax base of individual income tax include capital and labor,according to China's reality of small scale taxation on capital elements,taxation will mainly affect the distribution of labor income,improve the ratio of investment to consumption.Then this paper makes use of stata14 statistical software and econometric model to conduct the empirical analysis.The empirical results show that the coefficient of average tax rate of value-added tax?business tax and corporate income tax on the impact of investment and consumption structure are negative,and passed the significance test.The estimation results support theoretical findings aforementioned,which are also robust.Finally,combining the theoretical and empirical results,this paper proposes that reducing taxation on consumption,increasing taxation on capital is an important way to reduce the ratio of investment to consumption.However,from the practice of current tax reform,compared with the intensity of taxation on capital in the past,the intensity of taxation on consumption has been increasing,while the intensity of taxation on capital has been decreasing.Therefore,this paper reputes that we should accelerate the reform of individual income tax and begin to levy real estate tax in order to increase the taxation on capital gains,and proposes the following two suggestions: First,speed up the reform of current individual income tax towards the combination of comprehensive and classified individual income tax,solve the problem of unfair tax burden between heavy tax burden of labor gains and light tax burden of capital gains;The second is to speed up the real estate tax legislation,improve basic conditions and determine scientifically of the specific design of real estate tax.