Should the active fiscal policy focus on cutting tax or continue to focus on increasing expenditure on infrastructure construction? China's macro-economic policy has come to a critical moment of choice.It should be admitted that in recent years, China has launched a lot of tax reduction policies. However, cutting tax mentioned by the government departments refers to whether the new tax system can reduce the revenue compared with the revenue that can be collected under the ideal state of the old tax system. The author believes that the key to measuring whether to choose cutting tax as the main starting point of macro-economic policy lies in the macro tax burden, that is, whether the proportion of government tax revenue in GDP is declining.Some researchers or entrepreneurs have issued strong appeal for greater tax reduction. But the reasons for the appeal may not be consistent with the logic of decision-making. Looking back on history, cutting tax is not the leading choice of China's proactive fiscal policy. Interestingly, despite the implementation of proactive fiscal policy, the central economic work conference from 1997 to 2003 called for "increasing revenue and reducing expenditure". Whether to choose cutting tax or not, we should pay attention to the basic requirements of fiscal balance.From the perspective of China's situation, the central government's attitude towards debt has always been conservative, paying close attention to the macro risk of government debt. However, at the local level, it is true that if you can borrow more, you will borrow more.The proportion of China's economic construction expenditure is abnormally high, and the marginal performance is getting lower and lower in the macro view, which leads to the debt risk becoming larger and larger. From this point of view, it is time for China's proactive fiscal policy to adjust its direction.Whether the central economic work conference will choose cutting tax as the main starting point of proactive fiscal policy depends on the judgment and balance of the long-term and short-term contradictions of China's economy.
