Tax Policy Research On Stimulating Residents’ Consumption

Consumption, investment and exports are known as “three carriages” ofstimulating economic growth. A long time, China’s economic growth mainly relies oninvestment and exports, the contribution of consumption to economic growth isrelatively low. With the spread of the international financial crisis, China’s economicslowdown, investment and export-led model of economic growth become unsustainable.Consumption as final demand is the fundamental driving force to stimulate economicgrowth. Therefore, the expansion of domestic demand, especially the expansion ofresidents’ consumption will be the key to promote sustainable economic development.Tax as a mean of national macro-control is an important tool to stimulateconsumption. This paper bases on the theory of residents’ consumption and tax, throughempirical analysis to investigate the moderating effect of tax on the consumption, andthus to propose the tax policy recommendations. This article is unique in that part ofempirical research, that part use econometric time series models, select the goodsservice tax and personal income tax to focus on, then examine the relationship betweenthese two indicators and residents’ consumption, and on this basis, targeted tax policyhas been proposed.