Research on the Consumption Promotion Effect of Individual Income Tax Special Additional Deductions under the Goal of Common Prosperity

Han Liu; Jingyi Zhou; You Liu; Hairuo Wang; Yutong Kong

doi:10.54097/vr95er28

Authors

Han Liu
Jingyi Zhou
You Liu
Hairuo Wang
Yutong Kong

DOI:

https://doi.org/10.54097/vr95er28

Keywords:

Common prosperity, Special additional deduction for individual income tax, Consumption

Abstract

The report of the 20th National Congress of the Communist Party of China clearly stated that "common prosperity requires enhancing the role of domestic demand as a driving force." Among these measures, the special additional deduction for individual income tax plays a crucial role as an important tool for regulating income distribution and promoting consumption growth. Based on the macro background of common prosperity, this paper focuses on the promotional effect of the special additional deduction policy for individual income tax on residents' consumption behavior, aiming to provide theoretical support and practical paths for optimizing the tax system, promoting social equity, and driving economic growth. The research first analyzes the inherent coupling between this policy and the goal of common prosperity from three dimensions: income distribution regulation, social equity guarantee, and economic growth synergy. Then, it explores the mechanisms through which the policy influences residents' consumption from direct driving, indirect expectation guidance, and consumption upgrading orientation. Finally, it proposes suggestions such as dynamic optimization of deduction items, improvement of implementation mechanisms, and policy coordination and support, in order to enhance the precision and effectiveness of the policy and facilitate the realization of the goal of common prosperity.

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