The Impact Of VAT Tax Reduction On Residents' Income Distribution

Since the levying of value-added tax in 1979,China has experienced important stages such as tax-sharing reform,value-added tax reform,expansion of “reform of the camp”,and comprehensive “reform of the camp”.The reasons for promoting the reform of the VAT system in China are different.The tax system,the improvement of double taxation,the international financial crisis,etc.,but the ultimate goal of reform is to reduce the burden on enterprises and avoid imperfect tax systems affecting China's economic development.On the basis of a comprehensive “reform of the camp”,China further reduced the basic tax rate to 13%,narrowed the gap between the existing tax rate levels,and laid the foundation for the VAT deductible tax rate.However,in the VAT reform,due to the smooth transition of the tax system,a multi-rate tax rate structure has been set up,which has affected the tax neutrality of VAT to a certain extent.The value-added tax rate of VAT seems to be fair and neutral.In fact,due to the difference in the consumption structure of residents,the actual tax burden of residents is different,and the income distribution gap between urban and rural areas and residents is becoming larger.The multi-level tax rate structure of the VAT system is to keep the corporate tax burden changes reasonably,but excessive tax incentives and corporate tax evasion have caused the actual VAT tax rate and the statutory tax rate in different industries to differ.At the same time,the amount of household consumption expenditure decreases with the increase of income.The food and clothing expenses of low-income residents account for a relatively high proportion.The proportion of high-income residents' living services and cultural and entertainment services is higher,while the value-added tax rate of daily necessities is higher.In the industries of life service industry and entertainment industry,residents bear different proportions of tax burden due to their living expenses.The VAT burden rate of residents with low income level is higher than that of residents with high income level.VAT is therefore regressive.This paper is divided into six parts in the structure.The first chapter introduces the research background and research significance of this paper.It introduces the VAT rate based on the literature on the VAT reform of tax revenue distribution at home and abroad.The existing achievements and shortcomings in the research field of the influence of residents' income distribution lead to the research content and research ideas.The second part of the article analyzes the mechanism of VAT affecting the income distribution of residents.The specific process is that the VAT reform affects the tax burden of different types of enterprises.The increase in tax burden leads to an increase in costs.In order to protect income,enterprises will pass the tax burden on product pricing changes.In the process of tax burden transfer,the supply of goods and the price elasticity of demand It will affect the degree of tax burden transfer,so theoretically,under the multi-level tax rate structure,the difference in consumption structure of different income groups will lead to unequal value-added tax burden,and the VAT tax burden will decrease with the increase of residents' income.The third part expounds the reform process of China's VAT system and the status quo of income distribution,and provides a realistic basis for the following VAT reform program.In the empirical analysis of the fourth part,unlike the existing scholars' analysis of the income distribution effect of VAT,most of them use the statutory tax rate or directly multiply the value added by the actual VAT rate.This paper simulates the introduction of VAT deduction mechanism.The actual deduction of VAT,using the relevant data of the corresponding years of China Tax Yearbook,Input-Output Table,China Household Survey Yearbook,etc.,to calculate the actual tax burden of VAT in various industries,residents of various income groups,and urban and rural areas.The actual VAT burden rate and change of residents provide data support for the theoretical analysis of the regressive value-added tax.In the fifth part,through introducing the experience of reform of the VAT system in EU member states and countries in the Asia-Pacific region,we will find out and improve the reform measures suitable for China's current economic development level and tax collection and management capacity,and propose the direction of China's VAT reform.The sixth part is based on the empirical part of measuring the effects of different VAT reform programs,adjusting the direct tax indirect tax ratio;VAT rate level,tax rate structure and scope adjustment;improving consumption tax;increasing transfer payments,etc.Reform and improve the provision of policy optimization recommendations.