Cyclical Decline Or Structural Inflection Point:Discussion On The Current Slowing Down Of Tax Revenue Growth In China

Since the reform and opening up for more than about 40 years,with the steady progress and development of China’s socialist market economy reform,the output of national economy has achieved rapid growth,at the same time,there has also been a rapid increase in tax revenue and continuous optimization and upgrading of industrial structure.But public information shows that tax is the main source of fiscal revenue of central and local governments in China.since the tax system reform in 1994,its growth trend is no longer stable,even negative growth appears in some provinces and cities,and tax growth trends in different regions with different development levels tend to be divided,presenting their own characteristics.In order to clarify this phenomenon,this paper bases on the classical economic theory,through the use of data and empirical methods in recent years to supplement the relevant domestic literature and research to explain the main reasons for the slowdown of tax growth in China at this stage.From the classical economics theory,discretionary functional fiscal policy for the government in the economic downturn through tax cuts,increase government purchases to stimulate the economy,economic prosperity,through tax increases,reducing the government to buy to prevent overheating,so in our country by the high-speed economic growth into rapid growth in the background,whether functional finance caused by tax cuts or economic downturn caused by the tax base shrinks,tax revenues will eventually appear along with the economic cycle fluctuation corresponding changes.GDP is an important factor affecting tax revenue,and its growth is derived from the growth of different industries.Therefore,the adjustment of industrial structure leads to economic growth,thus affecting taxation.So this article is based on economic theory hypothesis is proposed: the main reason for the current tax revenue growth is slowing is industrial structure change trend of inflection point,rather than give priority to with cyclical fluctuations,the development of tax process can’t again as the economic recovery speeding back to the previous era of growth.Based on the panel data of 30 provinces and cities in China from 2001 to 2015,this paper adopts the estimation method of static and dynamic panel data model to verify the above hypothesis.From an empirical perspective,this article hypothesis got better validation: in a static panels fixed effects model,the level of the nation’s overall revenue growth to the dependence of bigger fluctuation of industrial structure,at the same time,considering the system of generalized moment estimator endogenous in the model are also similar results.But in the process of robustness test,the significant extent and size of this effect varies with the level of economic development,embodied in the economic development of the east,high degree of tax high degree of dependence on the industrial structure,and in the relatively backward in the Midwest,the industrial structure change and no significantly positive effect on revenue growth,this suggests that the fluctuation of industrial structure on the influence of the tax needs to be attached to such conditions as economic development.Therefore,this article study the corresponding policy recommendations,including not only the understanding of China’s tax revenue growth under the new norm,namely the current tax revenue growth is based on the industrial structure upgrade dominated by structural inflection point,also covers for local government in the economy under the new normal how to cope with the tax revenue of the opinions of the structural changes to solve financial problems.