The Impact Of Personal Income Tax Reform On Residents' Consumption

The most important thing in the growth of the national economy is consumption.However,under the continuous influence of the financial crisis,the long-term dependence on exports and investment to promote economic growth is no longer dynamic,and economic growth is slowing;expanding domestic demand and stimulating residents Consumption has become an endogenous driving force for the sustained and healthy development of the economy.China's household consumption rate has been at a low level for a long time,and the household consumption rate has dropped from 46.7% in 2000 to less than 40% in 2017,which is lower than the consumption rate of developed countries such as the United States and Japan.The contribution rate of household consumption to national economic growth is insufficient.At the same time,China's residents' consumption structure needs to be upgraded.With the continuous development of the economy,consumer demand is increasingly diversified and deep-rooted,and a single consumption structure can no longer meet the consumption needs of residents.Personal income tax is the tax that has the closest relationship with household consumption.It promotes sustainable economic development through a tax reduction policy to stimulate consumption and promote consumption growth.Based on the latest inter-period micro-panel data of CFPS,a double difference model is established,and different processing groups and control groups are constructed according to the size of the tax reform.The fixed-effects model eliminates the effects of unobservable values that do not change with time,controls economic variables and family characteristic variables,and further reduces the estimation bias caused by missing variables.At the same time,in the robustness test,the instrumental variable method is used to examine taxes.The effect of stimulating consumption is also consistent.The basic conclusion of this paper is that the personal income tax reform policy in 2011 has a significant stimulating effect on household consumption,and the taxable amount of tax is one yuan for each tax and the household consumption expenditure is increased by 1.152 yuan.However,the regression of consumer categories found that China's resident consumption structure is facing an upgrade and transformation.According to the research results,the article puts forward several suggestions for improvement in the future personal income tax reform in China: scientific adjustment of the exemption amount,reducing the tax burden of residents;appropriately expanding the tax rate,reducing the marginal tax rate;choosing a collection model suitable for China's national conditions.On the basis of summarizing and analyzing the classical consumption theory,this paper clarifies the mechanism of the effect of personal income tax on household consumption.The latest data is used to establish a double difference model for empirical research and conclusions.It overcomes the shortcomings of the above documents and enriches China's macro-control theory,which is conducive to perfecting personal income tax system.