Research On The Economic Effect Of Structural Tax Cuts Based On DSGE Model

In recent years,the Chinese economy has gradually slowed down,and has entered a new normal after experiencing a period of rapid growth.Since the traditional extensive economic growth is no longer sustainable,the economy is in need of transformation and upgrading,in order to achieve high-quality development in the conversion of new and old kinetic energy.The proactive fiscal policy is an important macro-control measure to achieve high-quality development.Cutting taxes and fees can inject strong impetus into high-quality development.The central government has repeatedly pointed out the need to implement larger tax cuts and fee reductions.The government has successively implemented tax and fee cuts through value-added tax reform,personal income tax reform,and corporate income tax preferential policies,which involve a wide range and large scale,showing the characteristics of structural tax reduction.Under the above background,this article studies the economic effect of structural tax cuts by constructing a dynamic stochastic general equilibrium(DSGE)model.This model includes important economic sectors such as household sector,manufacturer sector,technology sector,capital goods producers,financial sector,government and central bank.Through the simulation analysis of the effects of structural taxation policies,it has important theoretical and academic significance for understanding the differences in the impact of structural tax reductions on the behavior of different economic entities,and how to achieve high-quality development through further tax reductions.The possible innovation of this article is the use of a DSGE model of endogenous technological advancement to study structural tax policies.The simulation result of the model shows that consumption tax,labor income tax,and corporate income tax cuts are all crowding-in effects on output and private consumption.Among them,labor income tax cuts have the most significant crowdingin effect on output.Consumption tax cuts have the most significant crowding-in effect on private consumption.For private investment,labor income tax cuts and corporate income tax cuts have a crowding-in effect,while consumption tax is crowding-out effects.Labor income tax cuts have the most significant crowding-in effect on private investment.For the stock levels of R&D technologies and production technologies,consumption tax and labor income tax cuts increase the stock levels of both technologies.Labor income tax cuts have the most significant effect.