The Influence Of Enterprise Income Tax Effective Rate On Enterprise Employment

China has implemented a significant reform of enterprise income tax in 2008,which not only has cancelled the tax discrimination of domestic and foreign enterprises,but has reduced the general legal enterprise income tax rate from 33%to 25%,and has given further tax reductions for some specific areas and specific industry enterpriscs。Therefore,great changes of effective corporate tax rate have taken place.This major tax reform has been in place for a decade and it is necessary for us to assess the effect of the effective corporate tax rate on employment levelsFirstly,on the basis of literature review at home and abroad,this paper makes a theoretical analysis on the effect of the effective tax rate of enterprise income tax on the enterprise employment level.By partial equilibrium analysis and building the mathematical model,it tentatively suggests that the impact of the effective income tax rate on the labor market is uncertain,which mainly depends on the income effect and scale effect of the change of effective enterprise income tax has produced,and this effect exists obvious differences in the heterogeneity of different enterprisesSecondly,this article selects the relevant financial and employment data of listed companies from 2004 to 2017,setting the added employment rate and enterprise income tax rate as the core variable.This paper presents a stylized facts description of the changes of the core variables before and after the reform of enterprise income tax in 2008 and the correlation between them.The results show that the enterprise accession rate increased after the reform in 2008,while the enterprise effective tax rate significantly decreased after the reform in 2008.At the same time,the relationship between the two core variables is preliminarily explored.It is found that before the reform in 2008,the new employment rate of enterprises and the effective enterprise tax rate of enterprises were offset by each other,while after the reform of enterprise income tax in 2008,they showed a trend of increasing and decreasing in the same way.In addition,for different ownership and technical content and different financing constraint level,the relationship between the two also shows obvious heterogeneityThirdly,this paper uses Panel Data model to empirically test the effect of the effective tax rate of corporate income tax on the added employment rate.The regression results show that the effective tax rate of corporate income tax is negatively correlated with the added employment rate,and the enterprise income tax reform in 2008 improved the employment level of enterprises by lowering the effective tax rate of enterprise income tax.Besides,added employment rate of state-owned enterprises have fallen by 3.36 per cent,while non-state enterprises have increased by 1.02 per cent.Furthermore,compared with non-high-tech enterprises,high-tech enterprises are more affected.In addition,the added employment rate of enterprises with low financing constraints increased by 0.58%,while that of enterprises with high financing constraints increased by 0.80%,which was higher than that of enterprises with low financing constraints.Finally,this chapter made a summing up of the research conclusions,and then threw out some relevant policy suggestions on how to improve the employment level of enterprises and the whole society from two different perspectives of the government and enterprises.