A Study On The Coordination Of Fiscal Revenue And Economic Growth In Zhejiang Province

The relationship between the macro tax burden and economic growth has draw attention fromboth academic and social. The situation that Chinese government fiscal revenue growth is far more than GDP growthhas continued for many years.This situation triggered a heated debate. This paper reviewed the studies of related issues at home and abroad, analysedthe relationship between macro tax burden and economic growth theoretically, and proposed theoretical assumptions.With the tax situation and the economic development of Zhejiang province been considered, using the data of11cities in Zhejiang province, an empirical research on the coordination of fiscal revenue and economic growth of Zhejiang province has been carried on.The main work and the basic conclusionsof this paperare as follows:(1)A brief introduction to the Zhejiang province as well as the regional financial and economic development in the province. Find thatZhejiang province has a large economic, and the economic development level is high, the industrial structure is quite reasonable and the private economy is developed. The financial and economic development between the11cities in Zhejiang province are not balanced.This paper took the regional unbalance into the consideration in the study.(2)According to China’s national conditions, this paper put forward two principles for the definition of tax burden, and on this basis, made the following definition of tax burden:Tax burden is a kind of economic burden or the loss of economic benefits of the non-governmental sectors, which is caused by the government. When the government take some social production through the means such as tax, it will cuts the disposable income of non-governmental sectors. Tax burden reflects the distribution of socialproduct between the government and the non-governmental sectors.(3) From the theoretical perspective, the mechanism ofthe influence of macro tax burden to economic growth was discussed in this paper.The influence processes of macro tax burden on the economic growth through investment, consumption, labor and import and export were discussed.On the basis of predecessors’ research,we put forward the theoretical assumptions:Macro tax burden has two opposite effects on economic growth at the same time, a positive one and a negative one.And the positive effect is diminishing marginal, thus there is an optimal tax level, makes the maximization of economic growth.(4)Setting a qualitative research model, using the panel data of11cities in Zhejiang province, an empirical research has been carried on. The results support the proposed theoretical assumptions. We estimated the optimal tax burden level, and refer to the international situation provided by the world bank, that the macro tax burden level in Zhejiang province has reached even more than the optimal tax burden interval.Improveing macro tax burden will be not conducive to sustained economic growth.(5) On the basis of the research, this paper put forward the following suggestions: build and improve the system of public finance,promote the whole caliber budget management, adjust the structure of fiscal expenditure and adjust fiscal policy according to regional differences.