A Study Of The Tax Channel Of Economic Growth From Oil Price Fluctuation

Oil is directly related to the quality level of people’s life and the world economy as an important scarce resource. Simultaneously, oil plays an irreplaceable role in international politics and national security as an important strategic material. Therefore, the oil price has become a reflection of the country’s economic situation and people’s living standard pointer. Any change in the oil price will be concerned by the governments and people. With Brent oil price on behalf of the international oil price, and making a study of oil prices impact on our economic growth by Brent oil prices. Investigating the effect of oil price fluctuations on China’s economy has a far-reaching significance, and is very important by tax channel research.Firstly, this paper analyzes the trend of China’s macroeconomic, China’s domestic oil price and international oil price in a macro-level, according to domestic and international oil price and China’s macroeconomic data. Conclusions are as follows:Oil price fluctuation factors are supply and demand factors, monetary and fiscal factors and political factors. There has some significance on China’s oil development strategy of oil price fluctuations from some factors.Secondly, this paper makes a theoretical analysis of tax channel research of oil prices impact on economic growth by applying AD-AS model. Since the tax multiplier is negative, revenue is negatively correlated with the national economy. Therefore, the oil price change has certain macroeconomic impact on China in tax terms.Then, this paper makes an empirical study of tax channel research of oil price impact on economic growth. Steps are as follows:making a stationary test after processing the data, then makes regression analysis of simultaneous equations by three-stage least squares method, also does an ARCH-effect test according to the regression results; Then, making regression analysis of simultaneous equations by applying GARCH model, also does an ARCH-effect test according to the regression results; Making an empirical study of tax channel research based on the data from January2001to September2013, and takes a dynamic prediction for domestic oil prices and GDP from January2011to September2013by the estimated model based on the data from January2001to December2010. Then, does an OLS regression of the forecast data and the tax rate. Conclusions are as follows:Impact of oil prices on GDP mainly through tax channel, and changes in tax rates have a direct impact on output.Lastly, based on empirical analysis, proves once again that the impact of oil price fluctuation on GDP mainly through conduction from the oil tax rates, and changes in tax rates have a direct impact on GDP, which is consistent with the theoretical analysis conclusions. Therefore, according to the results of theoretical and empirical analysis, giving some policy recommendations in oil industry tax policy, oil market price mechanism, petroleum reserve system and sustainable development of the oil industry. These recommendations are as follows:Establish sound tax policy for oil industry; Establish sound mechanism for oil market prices; Strengthen the construction of oil reserve system and promote the sustainable development of the oil industry.