ABSTRACT
This chapter addresses the practical characteristics of the new round of proactive fiscal policy after comparing the similarities and differences between the two policies. During the period from 1998–2004, all social sectors never stopped their cries for tax cuts. From 1998–2004, proactive fiscal policy and moderately tight monetary policy constituted the "loose-tight" macroeconomic policy package. For low-income earners, it's the relatively low incomes that restrain their demands for consumption. For low-income earners, it's the relatively low incomes that restrain their demands for consumption. For middle- and high-income earners, it's the inadequate social security system that inhibits their demands for consumption. Talking about "tax cut", even the "structural tax cut" strictly defined at present; we need to clarify two issues at first if its effect is measured against enlarging consumption demand, particularly final consumption demand. The major taxes vary sharply from each other, so they need different tax reduction plans.
