Corporate Tax Burden And Economic Development In Transition Research

Since the reform and opening up, China has achieved great success in economic development. Meanwhile, problems are becoming more serious. High-input and low output extensive growth mode, which is driven by investment, leads to large consumption of nature resources and ecological environment degradation. Economic growth is constrained by resource and environment factors. At the same time, China's economic growth has not promoted employment. In order to escape the constrains of resource and environment, we must change the growth mode from reliance on large inputs of resources and capital to labor, and replace natural capital by human capital, to achieve sustainable development.Tax is a major tool to adjust macro-economics. Taxation has an impact on prices of products and factor of products (including capital goods), and leads to change in collocation of production, consumption and factor of products. In that way, operations of both enterprises and macro-economic are affected by price mechanism and capital formation mechanisms. That is how the corporate taxation works. The tax system, which is under sustainable mode, should be conducive to accumulation of human capital, and prevent abuse of natural resources as well. In other words, the tax system should encourage the development of labor-intensive industries, which can promote employment. Such tax system can be considered "green" and sustainable. So there is a question, how to judge whether our current tax system is "green"?Base on listed companies in China, this paper undertakes multiple regression analysis. The results show that our tax system is inclined to encourage investment and restrain the development of labor-intensive companies. So it is not good for employment and accumulation of human capital. Which means, our tax system is not sustainable, either "green". Therefore, we must reform the tax system. We should introduce environmental tax in current tax system, and abate other taxes related to human resource. In that way, employment can be encouraged and abuse of natural resources and environment can be restrained. So we can achieve sustainable development.