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expense of certain tax benefits at the expense of increasing the government's financial burden , even dragged into the difficult position of revenue . Therefore, in the present case the western financial difficulties to implement large-scale tax incentives is "worse ." However, the in-depth study on the economic impact of tax incentives course , you will find tax incentives to reduce fiscal revenue , while revenue will form a " self-liquidating " mechanism. Such income " self-liquidating " mechanism similar to the mechanism of the effect of tax cuts . Supply-siders one of the representatives - Paul Roberts pointed out that the direct loss of tax cuts , that the initial decrease in tax revenues , possibly by increasing revenues and increase savings and to realize their full compensation . Roberts believes that the relative price depends on marginal tax rates and tax flexibility , since the price level of inputs by the impact of high and low tax rates , and thus the labor supply elasticity , flexibility savings , investment flexibility , employment elasticity is subject to tax elasticity . If the tax elasticity is greater than zero , then the rate of increase will reduce the wage income , interest, profit levels , raise the relative price , thereby reducing the labor supply , savings, investment and job flexibility adverse impact on economic activity . At this time, if the lower tax rates , as long as the tax elasticity is greater than zero , reducing the tax rate may be more or less direct loss of tax revenue increases or savings rates have increased the compensation . For example, if the role of tax incentives in the tax on goods , ceteris paribus , the cost will drop accordingly , so that producers and traders are willing and able to expand production and increase social provision . If the role of tax incentives in the tax on , directly or indirectly, the government revenue foregone income transfers to taxpayers , thereby enhancing social investment propensity to consume , expanding social needs. Both sources can play a nurturing effect thereby increasing the total tax revenue . Income tax benefits " self-liquidating " effect not through taxation but through tax cuts generated , this revenue " self-liquidating " effect does not directly require additional state taxes , increasing tax rates , tax incentives can help - economic growth - Finance the increase in revenue mechanisms for the formation of a virtuous circle . Of course, to the formation of this virtuous circle mechanism must be related supporting measures. Western countries should reduce the proportion of fiscal revenue to the central government , for some provinces also need to increase transfer payments efforts.

On the one hand the western lack of funds requires a lot of bringing in outside investment, the other poor investment environment , funding difficulties . For the West , the lack of infrastructure , backward technology and equipment such as lack of management experience and is a major obstacle to their economic development . Therefore, to attract foreign investment to accelerate its economic development has become an important way . To attract capital investment , there must be a realistic and reliable investment environment, this investment environment, including the political environment, economic environment and legal environment . Current investment environment in the western region generally poor . Har