Analysis On Economic Growth Effect Of Local Tax Scale In China

As the inevitable behavior of government in the process of national development,tax revenue is closely linked with the overall economic situation of the country.On the one hand,economic development determines the tax development,the former is the root and source of the latter;the other hand,the tax can be counter-productive to the economy,it can promoting economic development,and may hinder economic development.Since 1994,the tax system reformed,China's tax system is divided into the central and local two parts,the central and local tax activities in accordance with their respective property rights and powers.Local tax as the main source of local finance,its size will inevitably bring influence on the development of local economy.This paper reviews the development and changes of the local tax system of our country,and to make quantitative analysis of economic development and local tax revenue in China.Through the establishment of the panel model,this paper takes the local tax revenue of 343 cities as the object of study and makes empirical analysis.The results show that,from a national perspective,the current scale of local tax revenue in our country has played a role in promoting economic growth.From the perspective of regional economic development,increasing the scale of local tax has the greatest effect on the economic growth of the eastern region,followed by the northeast region and the central region,and has no significant effect on economic growth in the western region.By analyzing the conclusion of the model,this paper puts forward the main policy suggestions that our country should further improve the tax system and expand the scale of local tax.