Changes In Corporate Income Tax Rate,Deduction Policy And Charitable Donations

The third distribution of current social wealth is inseparable from the important way of charitable donation.Charitable donations play a vital role in maintaining social order stability and narrowing the gap between the rich and the poor.The state also hopes to encourage more donors in the formulation of tax policies-enterprises actively participate in charitable donations.Then,with the current wave of tax cuts,can a series of tax reduction policies promote enterprises to donate? This article takes China's corporate income tax reform in 2008 as an entry point to further study how corporate income tax rate change,deduction policy of China's corporate income tax reform affect corporate charitable donations.Based on the existing research,this paper firstly discusses the theoretical mechanism of corporate income tax rate change and deduction policy on corporate charitable donation,and proposes the following basic hypothesis.Hypothesis 1: The reduction in tax rates has a positive effect on corporate donations and is significantly enhanced with the deduction policy..Hypothesis 2: Compared with enterprises with lower degree of marketization,the reduction of tax rate will promote market-oriented higher corporate donations,and the deduction policy will increase its contribution as the tax rate declines.Hypothesis 3: Compared with non-industrial enterprises,the reduction of tax rate will promote the donation of industrial enterprises,and the promotion effect of the deduction policy will increase with the decrease of tax rate.Hypothesis 4:Compared with state-owned enterprises,the reduction of tax rate will promote the donation of non-state-owned enterprises,and the deduction policy will increase its contribution as the tax rate declines.Hypothesis 5: Compared with enterprises with large assets,the reduction of tax rate will promote the donation of enterprises with small assets,and the promotion effect of the deduction policy will increase with the decrease of tax rate.Secondly,this paper uses the data of all A-share listed companies in China from 2006 to 2013 to construct a double difference model.Using the method of interactive term regression and group regression,an empirical test is carried out on Hypothesis 1-5.The results show that: First,the overall It is said that the decline in corporate income tax rate has effectively promoted corporate donations,and this promotion has been significantly enhanced with the increase in the amount of deductions.Second,companies with higher degree of marketization tend to donate more after the tax rate declines,and the willingness to donate is significantly increased with the increase in the amount of deduction,while the lower regions are underperforming.Third,the decline in the corporate income tax rate has promoted the donation of industrial enterprises,and the promotion effect has increased with the increase of the deductible amount,but the performance of non-industrial enterprises is not obvious.Fourth,the decline in the corporate income tax rate has contributed to the promotion of non-state-owned enterprises,and this promotion has increased with the increase in the amount of deductions.Fifth,the decline in corporate income tax rate has a stronger role in promoting the donation of enterprises with smaller assets,and the promotion effect has been significantly enhanced with the increase of the deduction amount.Based on the above conclusions and the analysis of the current situation,the enlightenment of this paper is:First,improving the degree of marketization in the region where the enterprise is located helps the company to make donations.Second,develop targeted tax reduction policies for industrial enterprises.Third,give more tax incentives to non-state-owned enterprises and smaller enterprises.Fourth,improve the relevant tax policies for charitable charitable donations.Fifth,increase policy propaganda.