Abstract: Based on the time-varying coefficient vector autoregressive model with potential threshold variables (LT-TVP-VAR) , the advantages of high-dimensional calculation is taken to empirically test the time-varying effect of China's tax structure is explored on supply factors in different periods from the perspective of supply, and explores the internal dynamic mechanism of tax system structure to effectively promote economic growth, it is found that the tax structure has a positive effect on physical capital, human capital, and labor force level, and a negative effect on technological progress. In different periods, the tax structure has a stronger effect on physical capital and labor force level, while it has a weaker effect on human capital and technological progress. The tax structure can only cause a short-term fluctuation of material capital, human capital and technological progress, but not long-term effect, and has a certain effect on the level of labor force in the short-term and long-term. The results of the study provide an effective empirical basis for the relevant government departments to rationally optimize the tax structure.

Keywords: tax structure; supply factors; economic growth; LT-TVP-VAR model