| The 1994 tax reform in China established the dominant status of indirect taxes.After 24 years of continuous reform and adjustment,the status of indirect taxes has not changed.With China’s economic and social development,the current tax system with indirect taxes as the main body has exposed many problems due to the indirect tax transferability.The Gini coefficient has been higher than the international warning line for 17 consecutive years.There are various reasons for the formation of many problems,such as severe polarization between rich and poor,rising prices,and inflation.However,the indirect taxation as the mainstay of the tax system is not without reason.The important sign of direct tax is that the tax burden is not easily passed on.If a society has this mechanism and gives it a strong economic and social effect,it can effectively suppress these problems.The establishment of a taxation structure with direct tax as the main body,focusing on its role in regulating income distribution,achieving social equity,and stabilizing economic development is an inevitable demand for social development.China’s direct tax as the main body of the tax reform has already met the environmental conditions.The total national income in 2017 was 825.016 billion yuan,an increase of 7.0% over the previous year.The per capita GDP was 59,660 yuan,an increase of 6.3% over the previous year.These data indicate that China has entered the ranks of the middle-income countries.In developed countries,such as Japan,the United States,and France,disposable income per capita amounts to USD264,USD1,550,and USD1,560,respectively.The per capita disposable income of China in 2016 was about USD3,758,which is 14,2.4,and 2.4 times that of Japan,the United States,and France.At this level,Japan,the United States,and France have successfully achieved key reforms that shift from indirect taxes to direct taxes,and China’s per capita disposable income is much higher than these countries,which means that China’s indirect taxes are fully met with the conditions of direct tax reforms.Based on the Laffer curve principle,empirical evidence shows that there is a positive correlation between indirect taxation and economic growth.In this area,the overall level of indirect tax burden is reduced,the overall level of direct taxation is increased,and the level of comprehensive tax burden is improved.Can achieve "double rise" with national income.This means that the establishment of a tax system with indirect taxation as the main body will not have a negative effect on the economy;in addition,many problems in China’s society have already reached the point of no change,and it is necessary to involve the society with relevant mechanisms and adjust itself spontaneously.Direct taxes are an important mechanism.Therefore,establishing a tax system with direct tax as the main body has become an inevitable choice for tax reform,and it is urgent.This article first analyzes the status quo of China’s tax structure,first of all focuses on the analysis of the proportion of indirect taxes.The current indirect taxes account for a greater proportion of tax revenue than direct taxes.In 2017,indirect taxes accounted for 52.17%,while direct taxes accounted for 44.19%.Second,it also analyzes the defects of China’s existing tax system structure or the main reasons for indirect taxation: First,the tax structure is irrational,circulation tax has long dominated,and income tax is in an auxiliary position.Although this tax system can increase tax revenue,it weakens the functions of income tax adjustment,economic stabilization and income distribution.Second,it is not conducive to sustainable economic development.The current tax system does not meet the needs of economic development and it is difficult to promote sustainable economic development.Because indirect taxation is the main taxation structure,it will cause the loss of our economic power and exacerbate inflation,which will be detrimental to the transition of China’s economy from high speed to high quality development.Third,it is difficult to achieve social equity,and indirect taxes have a negative regulatory effect.The tax burden on the poor is higher than that of the rich.In order to more clearly study the inevitability of China’s direct tax reform,the author of this article focuses on the environment of direct tax reforms in the United States,Japan,and France.The comparison found that China’s current economic strength and per capita disposable income level are much higher than those of the same countries at that time.Therefore,regardless of domestic and international environmental conditions,China’s direct tax as the main body of the tax reform is inevitability,and it has reached the time window for reform.This article uses VAR measurement model for empirical analysis and demonstrates the relationship between direct taxation and economic growth in China.Selecting the direct tax revenue and economic total from 1994 to 2016 and the proportion of direct tax to tax revenue and GDP growth as data samples to establish a model.The relationship between direct taxes and economic growth was explored through unit root test,cointegration test,Granger causality test,impulse response analysis,and variance decomposition.The results of the study show that direct taxation is positively related to economic growth,and direct tax reform can promote economic growth.According to the empirical results,two sets of transitional reform proposals are proposed.One is to raise the direct tax to the general status of the main body,and the proportion of the direct tax is adjusted from 41.19% to 50.02%;the other set of direct taxes is the main subject tax.Normally,the direct tax will be increased to more than 52%.On the basis of the internal structural adjustment of direct taxation,the widening of the tax base and the implementation of taxes will be realized.On the basis of the reform plan,three suggestions were made: First,the level of collection and management should be raised.We will improve the direct tax collection and management system,raise the level of direct tax collection and management in China from the three levels of tax collectors,taxpayers,and society,and reduce direct tax losses such as income tax.The second is to promote the internal structural adjustment of direct taxes,and to raise the level of comprehensive taxation of direct taxes by increasing or decreasing;third,broadening the tax base of direct taxes,levy inheritance taxes,pet taxes,social security taxes,etc.,and gradually improve the distribution of wealth in China.All problems will further regulate the separation between rich and poor. |
