Research On The Impact Of China’s Tax Structure On The Consumption Of Different Income Groups

The tax system structure is a coordinated tax combination relationship that the state sets up various types of taxes to obtain fiscal revenue and adjust economic requirements.Simply put,the tax system structure is the layout of the tax system.According to the requirements of the tax system reform in 1994,my country has a "dual subject" tax system structure,but the actual situation is that indirect tax occupies the main body of tax revenue.From 2007 to 2019,the average proportion of indirect tax to total tax revenue was 61.16%,and direct tax accounted for total tax revenue.The average of the proportion is 36.73%.The tax structure based on direct tax and the tax structure based on indirect tax have different effects on residents’ consumption.Direct tax affects residents’ consumption behavior by affecting consumption income,and indirect tax can change consumer’s consumption behavior by changing the relative price of commodities.Direct taxes include income tax and property tax.High-income people have higher incomes than middle-and low-income people,and they have more wealth of various types.The personal income tax calculated at progressive tax rates and the property tax levied on the property owned by individuals make low-income people more attractive.The relative tax burden is small,and the relative tax burden of high-income groups is large.Therefore,the tax structure based on direct tax has different effects on the consumption of different income groups.The tax burden transfer of indirect taxes is related to the price elasticity of commodity demand.The subsistence consumption expenditure of low-and middle-income groups accounts for a large proportion.The demand price elasticity of such commodities is relatively small,and the tax burden is easily transferred to such commodities,which makes the middle-and low-income groups relatively.The tax burden is large,so the tax structure based on indirect tax is not conducive to promoting the consumption of lowand middle-income groups.Starting from the impact of tax structure on residents’ consumption,this paper studies the difference in the impact of different tax structures on the consumption of low-,middle-,and high-income groups.By sorting out the relevant theories and literatures of the tax system structure,the impact of taxation on consumption is clarified,and the impact mechanism of different taxation system structures on the consumption of different income groups is deduced.Combined with my country’s taxation and consumption data,this paper analyzes the current structure of my country’s taxation system and the consumption status of different income groups.On the basis of theoretical analysis,the unbalanced panel data model for empirical analysis of impact tax structure on consumption of different income groups.Discovered by research: as the proportion of indirect tax increases,the consumption expenditure of different income groups declines,and the proportion of subsistence consumption expenditure of low-and middle-income groups increases;and the proportion of enjoyment consumption expenditure increased.According to the theoretical and empirical results,from the perspective of increasing the proportion of direct tax,promoting the consumption of low-and middle-income groups,and improving the level of consumption,this paper puts forward policy suggestions for the adjustment of the tax system structure.