The Influence Of Corporate Income Tax On Manufacturing Investment

As we all know,the troika that drives economic growth includes investment,consumption,and exports.Investment activities are the starting point for economic growth.Investment demand is a powerful engine for economic growth.With the changes in the global economic environment,China's economic growth rate has entered a state of medium and high-speed growth,and the growth rate of corporate investment has a clear trend.In addition,the implementation of the US “re-industrialization” strategy has caused the medium and high-end manufacturing industry to return to the United States to a certain extent.This has brought shocks to China's manufacturing industry to attract foreign investment,and has reduced the inherent cost competitiveness of China's manufacturing industry.Manufacturing enterprises' investment is facing the toughest challenge ever.How to re-stimulate corporate investment behavior and promote China's economy to maintain medium and high-speed growth is a relatively important proposition.There are many ways to stimulate investment in enterprises.According to past experience,countries around the world have regarded taxation policies as an effective economic way to optimize resource allocation,stimulate investment,and ease the contradiction between supply and demand.In China's taxation system,corporate income tax has a direct and close relationship with corporate value.At the same time,corporate income tax is a tax that directly affects corporate investment behavior.Therefore,corporate income tax is a tax that deserves special attention.What kind of impact will corporate income tax have on manufacturing investment,stimulate corporate investment or inhibit corporate investment,and the extent of its impact is worth exploring.On this basis,how to make the corporate income tax policy play a greater role in the investment of manufacturing enterprises,how to let enterprises maintain the investment status or even expand investment,how to develop medium and high-end manufacturing through enterprise investment is also worth exploring,it is also the research purpose and significance of this paper.This paper first summarizes the research results of predecessors,and uses this as a starting point to refine and summarize the two mechanisms of corporate income tax affecting corporate investment named the mechanism of capital cost and the mechanism of taxation effect.When summarizing the mechanism of capital cost,it is proposed that the cost of capital is affected by tax rate,interest deduction,depreciation and investment credit.From these four aspects,it is further analyzed how corporate income tax affects the optimal enterprise capital stock by affecting capital cost,and finally acting on corporate investment behavior.When introducing the mechanism of tax effect,it is listed from the impact of tax on investment income and portfolio investment risk.Tax revenue affects investment income from the perspective of income effect and substitution effect.The game result of two-way economic effect determines the enterprise.Income tax will stimulate or inhibit corporate investment.Taxation affects asset portfolio from the perspective of taxation on portfolio income and portfolio risk.Similarly,the investment of a portfolio of firms depends on the final outcome of the game.Then it sorts out and analyzes the enterprise income tax policies related to investment.It aims to show the efforts made by the Chinese government in promoting investment in enterprises and the achievements of taxation policies over the years.It also points out the problems of the policies and proposes for the subsequent chapters in order to give reasonable suggestions.On the basis of introducing the theoretical knowledge,this paper takes the data of total manufacturing revenue,total profit,total income tax and asset-liability ratio from 2002 to 2016 as the starting point,and draws on the research ideas of calculating the capital cost of the predecessors.The marginal real tax rate of corporate income tax in the manufacturing enterprises of provinces and municipalities in the past 15 years,found that the marginal real tax rate of manufacturing enterprises in these 15 years showed a "downward convex" trend,and each province and municipality showed such a trend.The more developed regions,the slower the rate of increase in the marginal real tax rate after 2008;the more the underdeveloped regions,the faster the marginal real tax rate of corporate investment is,or even up to 10%.After the unified income tax of domestic and foreign-funded enterprises,the marginal actual tax rate has been greatly reduced.To a certain extent,it reflects that the reduction of the statutory tax rate of corporate income directly leads to the reduction of corporate tax burden,and the reduction of tax burden makes the marginal real tax rate decline.After descriptive statistical analysis and multiple regression analysis on the five variables of investment amount,marginal real tax rate,capital cost,income growth rate and profit rate through statistical software,it further shows that the marginal real tax rate and investment amount of corporate income tax do have a negative correlation.In addition,this paper also analyzes the data according to the different statutory tax rates of corporate income tax and the regions where manufacturing enterprises are located.The purpose of this paper is to explore the different statutory tax rates and different external conditions.This paper summarizes the main findings.Finally,based on the above-mentioned development of the enterprise income tax policy and the status quo,it points out some problems existing in the current corporate income tax policy,and puts forward four reasonable policy recommendations,namely,cleaning up unnecessary tax incentives,giving local governments a certain autonomy in formulating tax incentives,improving corporate science and technology innovation and independent research and development tax policies and improving taxation supervision in order to provide reference for improving China's income tax system.