Empirical Research On Employment Incentive Effect Of Corporate Income Tax Relief

Employment is related to the well-being of people's livelihood,and it is always an issue that governments of all countries pay close attention to.China is a country with a large population.With the aging of the population,the labor force has declined,but the total employment pressure is still obvious.The prominent structural contradictions need to be resolved urgently.In the current downward trend of the global economy,"stable employment" is an important grasp of people's livelihood.In the 2019 government work report,the employment priority policy was also placed at the macro policy level for the first time,and it was clearly stated that the employment priority policy should be "full force",employment must be placed in a more prominent position,and all parties must be more focused on employment and support employment.As one of the important means of national macro-control,tax has become an important way of tax incentive to guide the economic behavior of enterprises through the reduction of corporate income tax.Enterprises are an important part of the demand side of the labor market.Encouraging companies to improve their employment is still an important way to solve employment problems.In the current context of "tax reduction and fee reduction",this article focuses on corporate income tax reduction and employment promotion as the main line,and explores the causal relationship between corporate income tax reduction and employment incentives from the perspective of empirical research.Specifically,this article first summarizes the relevant domestic and foreign literatures while clarifying the employment situation in China and studying the theoretical and practical significance of corporate income tax reduction to achieve employment promotion.Then theoretically analyzes the specific existence mode of corporate income tax relief,and puts forward the research hypothesis that corporate income tax relief will stimulate employment and is mainly achieved through the intermediary mechanism of income effect and substitution effect.Secondly,in the empirical part,this paper uses the quasi-natural experiment of raising the standard of deduction of wages and wages of domestic-funded enterprises before the merger of the two corporate income taxes in 2006,through the establishment of an experimental group and a control group of domestic-funded and foreign-funded enterprises,and effectively identified using the double differential model The tax exemption imposed by the company is exogenous.Empirical results show that corporate income tax relief can stimulate employment and increase corporate employment.At the same time,its effects are different between labor-intensive and capital-technology-intensive,eastern and non-eastern,and state-owned and non-state-controlled enterprises.Subsequent mechanism empirical part confirmed that the incentives for corporate income tax relief for employment are mainly achieved by increasing the after-tax income of enterprises to stimulate the expansion of enterprises and the income effect of investment.The substitution effect between capital and labor is not significant.Based on the current situation and the empirical findings,this paper draws on the corporate income tax relief policies that encourage employment abroad,and finds that there are advanced targeted and systematic credit concessions in foreign countries,such as preferential treatment to small and medium-sized enterprises.It is proposed to establish a long-term mechanism for employment reduction and exemption,taking into account the inclusiveness and structure of the reduction and exemption policy,and other corporate income tax reduction and exemption policies that optimize employment incentives in China.In the research method,this paper uses the double differential model to identify the variable of corporate income tax relief based on quasi-natural experiments,effectively avoiding the endogenous nature of the policy,and further uses the triple differential model for heterogeneity analysis,which is studying corporate income tax relief It provides new ideas for the empirical field of employment impact,and the research conclusions also provide directions for further optimizing existing corporate income tax relief policies.