Abstract: Models of Milesi-Ferretti and Roubini were expanded, and the dynamic relationship between the tax rate on capital income, labor income, consumption and private consumption which are embedded into endogenous growth model was studied, explicit relationships between consumption growth rate and various parameters were obtained by the Hamilton function, and relationship between tax rate structure and consumption growth rate were obtained by numerical simulation. The empirical study based on the Chinese provincial panel data from 2002 to 2013 suggest that labor income tax rate had a significant positive effect on household consumption; capital income tax, consumption tax rate has a significant negative effect on consumption, namely labor income tax rate is crowding in private consumption, while, capital income tax, consumption tax rate are crowding out of private consumption.

Key words: tax rate structure, endogenous growth model, private consumption, numerical simulation