IDEAS home Printed from https://ideas.repec.org/a/taf/reroxx/v36y2023i1p1972-2002.html
   My bibliography  Save this article

Incentive effect of structural tax reduction policy on consumption upgrading and high-tech industry

Author

Listed:
  • Yan Miao
  • Zheng Li
  • Zhonglin Bai

Abstract

China is implementing a structural tax reduction policy to upgrade the structure of household consumption and promote the development of high-tech industry. This article constructs a heterogeneous NK-DSGE (New Keynesian - Dynamic Stochastic General Equilibrium) model to study the effects of tax reduction policies on consumption upgrading and the development of high-tech industry. The tax categories involved in this model are divided into demand-side tax and supply-side tax. We build two indexes to measure the consumption structure and the development of high-tech industry. It is found that reducing high-tech enterprise income tax would upgrade the consumption structure and promote the development of high-tech industries in the short term. Reducing low-tech enterprise income tax would achieve similar effects in the medium and long term. Moreover, tax such as consumption tax, labour income tax and capital income tax reduction policies can upgrade the consumption structure and promote the development of high-tech industry in the long term. Finally, this article finds that when the elasticity of labour substitution is smaller, reducing high-tech enterprise income tax is more effective.

Suggested Citation

  • Yan Miao & Zheng Li & Zhonglin Bai, 2023. "Incentive effect of structural tax reduction policy on consumption upgrading and high-tech industry," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(1), pages 1972-2002, March.
    • Handle: RePEc:taf:reroxx:v:36:y:2023:i:1:p:1972-2002
    DOI: 10.1080/1331677X.2022.2094442
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1331677X.2022.2094442
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1331677X.2022.2094442?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhou, Qiuyang, 2024. "Does the digital economy promote the consumption structure upgrading of urban residents? Evidence from Chinese cities," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 543-551.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:reroxx:v:36:y:2023:i:1:p:1972-2002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rero .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.