Structure of this paper USES vector autoregression (SVAR) model method, study China's tax policy and government spending on output generated by the dynamic impact effect. Main conclusions are: (1) the tax revenue is the impact on output only negative short-term effect, namely the reduction of fiscal policy to promote growth in output in the short term. Government spending is the impact on output have a positive effect, but its long-term effect is effective. (2) the tax policy of raising taxes restrain private consumption, and enlarge the government spending would boost private consumption; (3) the tax policy of raising taxes discourage investment, expanding the government spending is to promote investment.

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