Abstract：Tax cut is not only an important part of proactive fiscal policy, but also a key measure to reduce cost in supply-side structure reform. Based on the data from 2002 to 2019, this paper analyzes the impact of major tax cuts on China's efforts of finding new economic growth drivers since our entry into the WTO. The findings are as follows.（1） VAT reduction aims to take multi-dimensional approaches to seek new economic growth drivers by means of rationalizing industrial structure. The corporate income tax reduction focuses on cultivating new growth drivers through optimizing innovation resource allocation and improving human capital structure, and there is a sequential logic between the two approaches. The corporate income tax reduction needs to first solve the problem of human capital mismatch to bring into play the power of innovation.（2） The incentive effect of new economic growth driver cultivation in northern China mainly comes from VAT reduction, while southern provinces mainly benefit from corporate income tax reduction.（3） VAT reduction is not conducive to the smooth shift of economic growth drivers during economic upheaval and slowdown, and its positive effect does not show until the reform period. The incentive effect on economy of corporate income tax reduction begins to show during economic slowdown, and actively cultivates new economic drivers for future development.（4） VAT reduction exerts a stronger driving force in regions with low fiscal self-sufficiency rate while the corporate income tax reduction is more effective in cultivating new growth drivers in regions with high fiscal self-sufficiency rate.（5） VAT and corporate income tax widen the gap in cultivating new growth drivers and increase difference across regions during economic slowdown, while in other economic periods they help achieve common development in the process of cultivating new economic drivers, which is in line with the fundamental requirements of collaborative development.
2022, Vol. 39 
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