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Title: Promoting Fertility Through Tax Policy: The Implications of US Policy Case to China

Citation Type: Journal Article

Publication Year: 2019

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Abstract: As countries around the world face a rapidly growing population crisis, various policy measures are being implemented to address the issue of low fertility. In particular, higher child support with the Great Depression of the United States has led to a serious decline in the US population. Accordingly, the United States implemented a child tax deduction policy in 1997 to increase fertility rates. China has also abolished the one-child birth policy that had been adhered to since the reform and opening up in 2016, and is revising its personal income tax and deducting tax subsidies to increase the birth rate. Therefore, this paper examines the prospects and effects of China's first policy attempt to address the low birthrate in relation to the US case. In the first part, the US case analyzes the correlation between household income, number of children, urbanization levels and fertility rates. Statistics show that the birth rate is positively related to household income and the number of children in the household, and the higher the level of urbanization, the more sensitive each family's childbearing behavior is due to the increased child tax credit. Based on this discussion, the second part draws implications for China's birth-related tax policy and presents policy directions. In conclusion, although China's personal income tax amendment and tax subsidy deduction policy is an appropriate policy response to the reduction of population, various tax credit provisions for each household's characteristics are still required. As the world faces a rising demographic crisis, various policy measures are implemented by many nations to tackle the population problem. Notably, high child-raising costs along with the outbreak of Great Depression led to the serious population fall in the United States. As a result, the US enacted Child Tax Credit (CTC) policy in 1997 to encourage childbirth. Likewise, China has also abandoned its one-child policy in 2016 and enacted a revision of Individual Income Tax (IIT) and Special Extra Deduction (SED) to retrieve households out of financial burden and boost the childbirth. Hence, this paper intends to examine the prospect and effectiveness of China's first policy ... China has also abandoned its one-child policy in 2016 and enacted a revision of Individual Income Tax (IIT) and Special Extra Deduction (SED) to retrieve households out of financial burden and boost the childbirth. Hence, this paper intends to examine the prospect and effectiveness of China's first policy ... China has also abandoned its one-child policy in 2016 and enacted a revision of Individual Income Tax (IIT) and Special Extra Deduction (SED) to retrieve households out of financial burden and boost the childbirth. Hence, this paper intends to examine the prospect and effectiveness of China's first policy ...

Url: http://www.dbpia.co.kr/Journal/articleDetail?nodeId=NODE08750197

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Authors: Kim, Sunyub

Periodical (Full): East Asian Humanities Society

Issue:

Volume: 47

Pages: 507-530

Data Collections: IPUMS USA

Topics: Fertility and Mortality, Other

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