Tax Collection And Management?burden Of Corporate Income Tax And Salary Cost

This paper takes the reform of China's income tax revenue sharing system in 2002 as a quasi-natural experiment.Based on the micro-database of Chinese industrial enterprises from 1998 to 2007,this paper uses the differences-in-differences model and the mediation effect model to study the changes of tax collection and management to the tax burden and salary cost of enterprises.The paper empirically finds that:First,the income tax revenue sharing reform reduces the proportion of local government income tax sharing,thereby reducing the local government's tax collection and management effort,so that the actual tax burden of enterprises paying taxes in the local tax bureau is significantly reduced;second,there is a significant correlation with the salary of enterprise employees and tax collection and management effort.The decline in tax collection and management effort has led to an increase in the salary cost of enterprises and a significant increase in the average salary of employees.Third,the change in tax collection and management effort affects the wages of enterprise employees mainly through impacting the corporate income tax burden.The specific transmission mechanism is the decline of tax collection and management effort,and the corporate income tax burden is reduced,which makes the salary cost of enterprises rise and the wages of employees increase.The research in this paper makes up for the shortcomings of the existing literature on the taxation and management of employees,and provides new thinking for the formulation of future tax policies.