The Impacts of Income Tax on Economic Growth in China
This study analyzed the impacts of income tax on economic growth in China during 2001-2016 by using panel dataof 30 provinces. First, this study applied panel unit root test to test whether the data is stationary or non-stationary. Then used Cointergartion Test and found that there exists long run relationship between income tax and economic growth. Last, Hausman test shows that the fixed effect model is more appropriate in this study. The regression result indicates that both corporate income tax and personal income tax have positive impact on economic growthin china. The impact of personal income tax is more effective than corporate income tax on economic growth. And the government expenditure also have positive on economic growth in China.
Index terms - Income Tax, Economic Growth, Panel Data, Fixed Effects, Long Run Relationship