The Analysis Of The Influence Of Structural Tax Reduction To Economic Growth Of China

Since economic crisis occurred in 2008,China's economy has been shown downhill trend and the world economy is also shrinking.It is possible to improve the situation only replying on external help.Faced with this problem,China introduced structural tax reduction to reduce the income gap,adjust the industrial structure and promote economic growth.This paper aims at understanding the impact of structural tax reduction on economic growth and analyzing whether the structural tax reduction can stimulate economic vitality.It firstly analyzes the current structural tax reduction progress and economic development situation in our country from the data and theory and clarifies the scant domestic demand and imperative structural tax reduction.With the help of grey prediction method,the paper obtains that the structural tax reduction in 2008 and the replacement of business tax with value-added tax in 2013 promoted the great change of national economic development trend,thus indicating that the economic effect of the structural tax reduction.Then it expounds the action mechanism of structural tax reduction and clarifies the influence path of structural tax reduction for economic growth.It focuses on the empirical analysis of the influence of structural tax reduction on economic growth.To do this,it begins with the selection of main tax.Alternative taxes are chosen at first under the consideration of related data and financial policy.With the relative analysis of alternative taxes,other tax revenues and total tax revenues,it shows that confidence level between alternative taxes and total tax revenues is more than that between other tax revenues and total tax revenues.Consequently,this paper chooses the value-added tax,consumption tax,business tax,corporate income tax,individual income tax and tariff as main taxes.Then influence of structural tax reduction on economic growth is analyzed empirically by establishing the vector autoregressive model of value-added tax,consumption tax,business tax,corporate income tax,individual income tax,tariff and GDP.The empirical results show that the main taxes have a relatively obvious impact on GDP.Once the value-added tax increases,the business tax decreases or corporate income tax decreases,the GDP will increase.These all are consistent with the current replacement of business tax with value-added tax implemented in our country and corporate burden reduction,which also confirms the applicability of policy.In order to determine the main influencing direction of structural tax reduction on the economy growth,this paper establishes the vector autoregressive model between main taxes and consumption,investment,import and export,respectively.Results show that the influence of structural tax reduction is greatest on import and export,middle on investment and least on consumption.Finally,with the help of theoretical and empirical analysis,it puts forward the suggestions to improve the economy growth,including adjusting the tariff,perfecting the value-added tax,improving the consumption tax and innovating the corporate income tax.