Research On The Optimization Of Value Added Tax Based On The Perspective Of Social Welfare

Optimizing the value-added tax system is a hot topic in the field of tax policy.After the policy of replacing business tax with value-added tax,the level of tax rate is complicated,which is not conducive to the use of a neutral value-added tax advantage,and a simple tax rate and reduction of tax burden become the direction of reform.Therefore,this article focuses on the trend of value-added tax reform,starting from the perspective of social welfare to study China's value-added tax system.The basic idea of this paper is to study the welfare effect of VAT and analyze how to optimize the VAT system so as to improve social welfare.This article first studies the development trend and reform focus of China's value-added tax system,sorts out relevant literature at home and abroad,and makes a brief review to determine the research perspective and research content;at the same time,it analyzes the connotation,form,and characteristics of different social welfare functions and compares various social welfare measures.Methods and welfare index,the final selection of Amartya Sen welfare index and DLI index to study the welfare effect of China's value-added tax.Secondly,the micro-simulation method was used to analyze the welfare effect of the VAT tax rate structure.Using the data of the consumption expenditures of urban residents in different income groups and the VAT tax rate structure data of different policies,based on the theory of tax liability transfer and welfare economics,using the Amartya Sen welfare function and index to construct the VAT welfare effect.(1)After calculating the Gini coefficient,MT index and post-tax benefits,the results show that VAT has negative effects on income distribution and negative welfare effects.(2)Analyze the policy of replacing business tax with value-added tax.The results show the policy can reduce residents' tax burden,but it does not significantly improve the income distribution gap.(3)To measure the welfare effect of the 2017 tax rate degeneracy policy,the results show that the policy optimizes the tax rate structure of VAT,which not only reduces the tax burden on residents,but also reduces VAT regressivity,narrows the income distribution gap,and makes the after-tax welfare ratio.During the period of “reform from the camp”,it increased by 0.29%.(4)In conjunction with future reform trends,we studied the welfare effects of the five reform programs.The results show that,on the one hand,welfare levels can be improved by lowering the tax rate.For example,the 17% tax rate will be adjusted to 16%,and the 11% tax rate will be adjusted to 10%.This reform scheme will help reduce residents' tax burden and reduce VAT regressivity.This raises the post-tax benefits by 0.33% over the benchmark;on the other hand,it can also improve welfare by continuing the degeneracy of the tax rate.For example,deflating the tax rate to 11% and 6% can not only reduce the tax burden on residents,but also reduce the tax burden.Retiring,making after-tax benefits increase by 1.66% from the benchmark.Again analyze the welfare effect of VAT ratio.In order to more comprehensively analyze the effect of VAT benefits,this article also selects DLI index as a comprehensive proxy indicator of social welfare in the macro-empirical part,and constructs a fixed effect model to analyze the impact of VAT ratio on social welfare.After controlling a series of factors such as people's spending preference,urbanization level,government size,population structure,and unemployment rate,the value-added tax coefficient is significantly negative,indicating that excessively high proportion of value-added tax will harm social welfare.Finally,in conjunction with the foregoing analysis,suggestions are made mainly from the aspects of optimizing the tax rate structure of VAT,lowering the tax rate,rationally lowering the standard tax rate,and appropriately lowering the proportion of VAT.