Review And Expectation: Tax Reform In China

Tax is the main revenue and macro-control means of a country. Tax system takes great effect on social and economic development. Thus, research on tax system reform in China is of momentous theoretical and current significance. This paper reviews three main theories of tax reform, which are theory of equitable taxation, theory of optimal taxation and theory of fiscal exchange; analyses the causes, peculiarities and trend of tax reform in the world; reviews the changes of tax system since 1949 in China. However, the tax system does not match social and economic development now. With scientific concept of development as guide ideology, this paper insists that it is necessary to follow a development path characterized by high productivity, affluent life and sound eco-system by properly balancing equity and efficiency, economic and social development, development of man and nature. This paper also points out that the new tax system should lower the institutional tax burden, strengthen the effect of regulating the income and distribution and properly balance economic and social development.