The Influence Of Fiscal Illusion On Taxpayer’s Right Awareness

Since the economy has developed with a continuously high speed in China and the economic system has been constantly improved amidst reform,Chinese taxpayer’s right awareness is awakening with great room for improvement.It’s very important and significant to research the taxpayer’s right awareness for protecting the rights of taxpayers better and improving tax compliance.Among lots of influencing factors to improve taxpayer’s right awareness,there are limited researches which focus on the influence of fiscal illusion on taxpayer’s right awareness.As a common economic phenomenon,fiscal illusion usually refers to taxpayers’ underestimation of their tax burden.In recent years,China have completed a series of fiscal and tax reform measures,promoting the standardization China’s tax system,and the proportion of indirect tax and non-tax income has been gradually reduced.These measures have a positive effect on reducing fiscal illusion.This paper makes a theoretical analysis and assume that the fiscal illusion would weaken the taxpayer’s right awareness of local residents.To test this assumption,this paper measures the taxpayers’ sense of rights by the questions D91 and D96 in CGSS 2010,and construct MIMIC model to measure the regional fiscal illusion index in China,based on data of China Statistical Yearbook from 2005 to 2015.Combined with the microcosmic data of CGSS 2010 and the fiscal illusion index measured,this paper further study how the regional fiscal illusion influence taxpayer’s right awareness by constructing the ordered probit model.The results show that the higher the regional fiscal illusion index is,the weaker the taxpayer’s right awareness is,which means the fiscal illusion would weaken the taxpayer’s right awareness.Meanwhile,for residents of different nations and religious beliefs,the impact of fiscal illusion on taxpayer’s right awareness is different.By reducing the regional fiscal illusion,the research results of this paper provide policy suggestions for enhancing taxpayer’s right awareness.