Research On Tax Policy To Expand Individual Consumption Under Financial Crisis

The overall demand of a country includes investment, consumption and net export. The three items coordinate development plays an important role in promoting national economy. Though our country's economy has developed rapidly recently, the proportion of the three major demands is obvious imbalance. The imbalance mainly reflected in the following:The mechanism which fuels economic growth is not perfect; The export dependence is too high; The investment rate have increased notably; The consumption rate have declined dramatically; The imbalance economic development model can promote economic growth, but at the same time it also cause some social problems. Under the influence of economic crisis in 2008, our exports faced serious challenges, moreover the role of investment to economic development works mainly in the short term, which means economic development must rely on domestic demand instead of international market demand. Consumption plays an important role in economic development, which is the ultimate power of economic growth and the essential power of the rapid development of market economy. Therefore how to make policy measures that rely on consumption is the focal point of our macro-control policy.By using comparative analytic and history analytic approach, this article mainly study the reason and influent factor of lack of resident consumed demand in the special background of the financial crisis, and the countermeasure to expand domestic consumption demand.Except introduction, the article consists of four parts:PartⅠ:The theoretical basis with which tax policies promote residents' consumption. First, this section introduces the general theory of consumer demand, which includes Keynesian's Absolute Income Hypothesis, Dusenberry's Relative Income Hypothesis, Franco Modigliani's Life Cycle Hypothesis and Friedman's Permanent Income Hypothesis. Secondly, the mechanism of action with which the tax policy promotes consumption of residents. The article analyzes the impact of tax policy on the residents'consumption capacity, consumption intention and consumption environment from four aspects, such as residents'current disposable income, permanent income, income distribution, the uncertainty of the expected, supply structure of consumer goods and consumer field. This section can provide theoretical support and evidence for the following contents.PartⅡ:The background of China's expanding consumer demand. First, the section analyzes the current situation of our consumer demand. By introducing the ratio of consumption, propensity to consume and the contribution which consumer demand to economic growth, the article reveals the fact that the consumer demand of our country is low. Secondly, this section expounds the reason of insufficient consumer demands from four aspects, such as residents'income level, income differential, the instability expect of income and expenditure and environmental factors. More over, this section analyzes the need to expand consumption in the context of the current financial crisis. Consumer demand is a vital strength to stimulate economic development. Given the current economic situation, consumer demand is also the fundamental way to change China's economic growth mechanism.PartⅢ:The tax policy and problems of China to expand consumption. Firstly, this section analyzes the tax policy with which to expand consumer demand, analyzing its effectiveness. Secondly, this section analyzes the problems which is not conducive to expanding consumer demand issues in the current tax policy from four aspects, such as the imperfect employment policies affect the raise of income level, the personal income tax system is not conducive to regulate the distribution of income, the inadequate social security system influence the residents'consumer confidence, tax policies to encourage consumption hot spots missing, etc. The consumption hot spot includes house consumption, automobile consumption, services consumption and tourism consumption, etc.PartⅣ:The tax policy chosen to expand consumption in post-crisis era. As to the problems of China to expand consumption, this section made pointed references to the tax policy to expand civilian consumption. The main measures are as follows: improving the level of employment to increase income, narrowing the income gap and promoting peasant consumption tend to increase average propensity to consume, enhancing people's consumption will, creating a good consumption environment to enhance consumer's consumption confidence, etc.