Study On The Macroscopic Effect Of Tax Rate Shock Under Financial Friction

As a basic way of macroeconomic regulation and control,fiscal policy has the characteristics of high flexibility and short external lag compared with monetary policy.Therefore,the formulation of fiscal policy and its policy effectiveness have long been hot topics in academic research.A sound and reasonable fiscal policy can not only achieve the effect of macroeconomic regulation and control immediately,but also improve the credibility of the government and guide the public to form a benign future expectation,thereby promoting sustained and steady economic development.In recent years,China has faced the dual challenges of economic downward pressure and difficulty in maintaining rapid economic growth.Although the central bank has adopted continuous measures to cut interest rates,the stimulus effect on the economy in practice is very limited,which indicates that it is currently in China.In the case of weak demand and unbalanced economic structure,it is difficult to effectively control the effect of a single monetary policy alone.Therefore,how to achieve structural tax reduction through positive fiscal and taxation policies,improve China's existing economic structure,and thus promote the healthy growth of the macro economy and improve the level of social welfare is a hot issue that needs urgent exploration.In addition,there are many types of taxation,and the macroeconomic effects of adjusting the taxes imposed on different links such as production,circulation,and consumption are not the same.Therefore,what kind of tax instrument combination is chosen for the economic difficulties in China's current period? And how much adjustments to the level of tax burden on a large scale,how long after the regulation will have an effect on the economy,these are important research contents under the hot topic of structural tax reduction in China.Combining with the current situation of high operating cost and insufficient investment demand in China,this paper introduces financial friction and credit risk mechanism in the New Keynesian dynamic stochastic general equilibrium model,and systematically analyzes the two categories of labor income tax and capital income tax.Under the framework of the economic cycle model of financial accelerators,the macroeconomic effects of different tax rate adjustment methods are further explored.This proposal proposes the implementation of structural tax reduction under the current economic conditions in China.According to the research,we believe that: Firstly,in the financial economic cycle model incorporating financial friction,the impact of capital income tax rate will lead to non-monotonic variables such as capital price,corporate net value and corporate debt leverage through the interest rate adjustment mechanism in the credit market.The constant interaction between these variables will led to a significant amplification effect of financial accelerators on economic fluctuations.Therefore,compared with the adjustment of the labor tax rate,the adjustment of the capital income tax rate is more effective in regulating the economy and society,while it also brings more strong volatility,repeatability and uncertainty.Secondly,although the negative shock on the labor tax rate will stimulate the consumption of the family sector,under the government's adjustment of the feedback mechanism of public debt,the government will reduce public expenditures,through the government's behavior similar to automatic stabilizers,the adjustment of labor tax rate for investment.And the regulation effect of total output is not obvious,but it can bring about a sustained consumption level higher than the equilibrium state.Thirdly,the reduction of the labor income tax rate will bring a small reduction in the corporate debt leverage ratio.In contrast,the reduction of the capital income tax rate will significantly improve the corporate debt structure and reduce the operating costs of enterprises in the initial stage after the impact,but in the later stage,the corporate debt structure will deteriorate,so it is possible to consider cooperating with labor in the later stage.The adjustment of the tax rate shall be used cautiously;Finally,from the perspective of measuring the effectiveness of fiscal and taxation policies by the cost of social welfare Due to the adjustment of tax rates on capital leads to greater volatility of most variables,the final adjustment capital income tax rate from the value point of view can lead to greater social welfare increase.For the government,the government should rationally and flexibly use the above two types of tax adjustments in the microtransmission process,the possible offset or amplification effect between economic entities,and the type of tax that the camera chooses to use for different periods of time.The extent of policies and regulation will maintain the overall stability of the economy while maintaining the improvement of social welfare.