Analysis On The Effect Of Tax Structure

During the past years that China adopted the policy of reform and opening up, China’s economic development has made remarkable achievements. At the same time, along with the deepening economic reform, China’s tax system also has gained constant adjustment and improvement. To a great extent, our tax structure adapted to the requirements of the market economic system, especially since the implementation of the tax system of1994. During this period, China’s tax system has experienced a number of marginal adjustments again, but there are still many unreasonable places, one of the biggest problems is that the tax structure has not changed.However, in the past ten years, China’s socio-economic environment has undergone great changes, which also created a lot of friction between the existing taxation system and its economic and social environment interdependence the system depended on, with some problems and drawbacks beginning to emerge gradually in the accumulation of the operation of the tax system. There is no doubt that, in order to adapt to the new economic situation, it is necessary to make the appropriate adjustments to the China’s current tax structure.Starting with the overview of our tax structure since1994, this paper systematically analyzes the relationship between tax structure, economic growth, income distribution and the income elasticity of the government, respectively from the perspective of theoretical and empirical study. There are six chapters in this paper. The first chapter is the introduction, which mainly introduces the topic, achievements and development trend of domestic and foreign research, the basic framework and the research methods. The second chapter briefly describes the five major tax reforms since the founding of new China, and focus on the change of China’s tax structure since the tax system reform of1994in order to provide related data for the following research analysis. Chapter3to chapter6are the main parts of the article, which analysis the effect of the tax structure, and put forward the policy recommendations of the reform of the tax structure. What the chapter3analyzes firstly is how the tax structure contributes to economic growth and then analysis the relationship between the tax structure and the economic growth, using the data of 1994-2012. The fourth chapter summarizes recent trends and current situation of the income distribution, and gives a contrast between current tax structure and income distribution. The result of the study is that only income tax has a negative impact on income distribution. And income tax has expanded the income gap. In the chapter5, firstly we obtain the numerical calculation of the income elasticity of the government, then analysis the relationship between the tax structure and the income elasticity of government, using the method of OLS. The regression result is that the Other tax has a positive impact to the income elasticity of the government. The last part firstly summarizes the necessity of the adjustment of the current tax structure, and then provides a positive, powerful countermeasure to the design of the overall tax structure in china.Through the combination of theoretical analysis and empirical analysis, qualitative analysis and quantitative analysis, this paper makes the results more reasonable, objective, scientific and accurate. In the part of theoretical analysis, this paper draws on previous related tax theory, a qualitative analysis of the relation between tax structure and economic growth, income distribution and the government revenue elasticity. At the same time, this paper collects data about different tax structures, GDP, Gini coefficient and so on, and studies the characteristics and rules of data change from quantitative angle, and then uses the empirical model to evaluate effects of China’s tax structure. The innovation of this paper lies in the effect of tax structure in three aspects of economic growth, income distribution and government revenue elasticity. Through the theoretical and empirical analysis, I think that the effect of tax structure is not limited on one aspect, they have a great impact on the economic and social. On the basis of past research, this paper broadens the scope of the effect of tax structure and makes up for the deficiency of the current research.It makes the research results more comprehensive, more persuasive. At the same time, this paper uses the time series model in order to make the research results more accurate, which can reflect the important impact of the major tax reform. This paper also put forwards some suggestions on the future direction of China’s tax reform. So this article has more practical significance.The shortage of this article lies in the limited level of the author. Although the paper analyses the effect of tax structure systematically, it is not thorough enough in the aspects of theory and data extraction. The other aspects impact of tax structure has not been further exploration. And the recommendations of reform of the tax structure are not mature enough.