An Empirical Study On The Relation Between Taxation And Economic Development Of Jiangsu Province

Taxation is an indispensable governmental conduct in market economy, and is also the main source of fiscal revenue. The increment of taxation and economic development are inseparable from each other, for on the one hand, the level of taxation is decided by the economy, while on the other hand, taxation exerts great impact on the development of economy and performs as the adjustor.Since China adopted the policy of reform and opening up, there has been a tremendous development of the economy of Jiangsu Province, meanwhile taxation has also experienced quick increase, making a synchronized development of both economy and taxation. Particularly, in recent years, as a whole, the level of tax increment is greater than that of economic development. Then, this paper analyzes the reasonability, reasons and possible solutions of this phenomenon by focusing on the relation between taxation and economic development of Jiangsu Province.Relevant theories concerning the relation between taxation and economic development are presented in the beginning of the paper. Then a brief introduction is made about the taxation and economic development of Jiangsu Province, and the third part is shown an empirical study of the relation between taxation and economic of Jiangsu Province in the aspect of total volume: In the aspect of total economic volume, a path analysis of taxation, GDP, consumption, investment and net export is made; for the total taxation volume, an analysis of the relation between macro tax burden and economic development of Jiangsu Province is conducted, and empirical analyses are made about the macro tax burden, tax elasticity, the relation of real GDP increment which rejecting the price factor and the increment of tax revenue. Then, after these analyses, some conclusions are made. Finally, the author proposes some solutions and suggestions, like improving and enlarging investment, increasing consumption demands and optimizing the level of macro tax burden, and so on.