Research On The Redistribution Effect Of Regional Preferential Tax Policies

Regional tax preferential policy is an important policy tool in China,the goal of which is to promote the reallocation of resources between developed and backward regions through tax incentives and to promote coordinated development among regions.China Western Development Policy is a regional policy that covers the widest area,has been implemented for the longest time and has the strongest tax incentives in China,which specifies that corporate income tax is levied at a 15% tax rate on enterprises meeting the conditions in the policy support areas.It has been documented that the Western Development Policy has promoted the economic development of the western region and narrowed the gap between the east and the west.However,regional tax preferential policies on the negative externalities of factor outflows have not been paid attention to.This thesis takes Ganzhou and other surrounding areas in Jiangxi province as examples to study the redistributive effects of regional tax preferential policies and the negative externalities on non-policy preferential areas.This thesis firstly defines the concepts of regional tax preferential policies and tax preferential policies for Western Development,introduces the theoretical basis of this thesis from two aspects: tax competition theory and Siphon effect theory,then analyzed the influence mechanism of regional tax incentivesa.Secondly,this thesis combs the tax preferential policies for Western Development in Ganzhou,introduces the current development status of Ganzhou and puts forward the research hypothesis based on the theoretical basis.Thirdly,this thesis takes a total of 46 counties in Ganzhou and other non-preferential areas in Jiangxi Province as the overall sample from 2010 to 2015,empirically analyzes the role and degree of influence of tax preferential policies for Western Development on value-added tax(VAT),business tax and corporate income tax revenue by using a double difference model with transformed control groups,and verifies the research hypotheses.Finally,this thesis summarizes the conclusions and puts forward the relevant policy recommendations accordingly.Based on the corporate income tax preferences in the Western Development,this thesis studies the impact of tax preferences on the flow of tax base and draws the following conclusions:(1)Tax preferences policies in the Western Development can promote the growth of tax base within Ganzhou region,and the revenue of business tax and VAT is significantly increased.(2)The redistributive effect brings tax base growth effect to Ganzhou at the cost of tax base loss in the surrounding areas.The closer the area to the policy preference,the less the migration cost paid by the intra-regional enterprises,the more obvious the regional tax base loss.Accordingly,this thesis puts forward policy suggestions from three perspectives:Increasing tax base preferential treatment,promoting Ganzhou’s demonstration and leading role as a central city,Diversification of tax incentives,strengthening the development cooperation between Ganzhou and neighboring regions,and expanding the scope of tax incentives for the large-scale development of the western region,which will help Ganzhou further implement the tax preferential policy for Western Development while reducing the negative spillover effect of the policy on neighboring regions,reducing the new development gap brought about by the redistribution effect,and promoting the synergistic development of Ganzhou and neighboring regions.