Research On The Impact Of Effective Marginal Tax Rate Of Corporate Income Tax On Investment In China

Investment is the engine of a country's economic development.In recent years,China's investment has lacked vitality,and the growth rate of investment has shown a downward trend.How to guide effective investment has become a major issue to be considered when formulating economic policies.Among the various factors affecting investment,corporate income tax has become a key link affecting corporate investment by changing the pre-tax and post-tax investment income of enterprises.There are usually three tax rates that measure corporate investment behavior.The most intuitive one is the statutory tax rate.The company transfers profits through the comparison of statutory tax rates between countries.The second is the effective average tax rate.By measuring the total tax revenue paid by the company in a year,the actual tax burden of the business has been measured,which is suitable for intensive marginal investment analysis.The last is the effective marginal tax rate,which is the discounted value of the tax levied on the income generated by the additional unit investment.By measuring the tax wedge between the pre-tax income and the after-tax income of the expected marginal investment project,It is possible to estimate the tax burden of marginal investment projects,which is predictive and suitable for extensive marginal investment analysis.This paper studies the impact of corporate income tax on the extra marginal investment of an enterprise.Therefore,the effective marginal tax rate is selected as the mechanism analysis index of corporate income tax affecting the incremental investment behavior of enterprises.This paper first introduces the concept and characteristics of effective marginal tax rate from the perspective of economics,and uses the theory of capital user cost to derive the measurement method of effective marginal tax rate.Secondly,using the method of Devereux capital cost effective marginal tax rate measurement,the overall situation of the effective marginal tax rate of corporate income tax of Chinese enterprises in 2003-2017 is measured,and the approximate position of China's macro tax burden in the international are evaluated under the same caliber.In addition,this paper also adopts the method of calculating the effective marginal tax rate of corporate income tax of the Congressional Budget Office(CBO),and further analyzes the effective marginal tax rate structure of corporate income tax in China from 2003 to 2016.Again,this paper makes a regression estimate from the overall level,confirming that the effective marginal tax rate has a significant impact on investment.In order to enhance the credibility of the conclusions,the robustness test was carried out from the industry level of the enterprise.Then,based on the regression results of benchmark regression and robustness,the problems are analyzed from the two dimensions of the enterprise and the industry,and the impact mechanism of effective marginal tax rate on investment is analyzed.Finally,the paper summarizes the full text,and proposes policy recommendations for using the income tax policy to guide enterprises to invest effectively in the current situation in China.Through the research,the paper draws the following main conclusions: First,the effective marginal tax rate of corporate income tax has a significant impact on investment,and the investment margin is reduced by 1.041% for each unit of effective marginal tax rate.Second,because different types of assets correspond to different tax concessions and depreciation years,investing in different types of assets will have different effective marginal tax rates,of which the highest effective marginal tax rate is for buildings,and the lowest is for machinery and equipment.Third,due to the role of tax shield,the effective marginal tax rate of various assets of equity financing is higher than the effective marginal tax rate corresponding to debt financing.Fourth,the industry bias of taxation policies and the policy applicability of the industry's own characteristics have led to differences in effective marginal tax rates between industries.Fifth,the statutory tax rate,tax depreciation policy,taxpayer body,industry characteristics,inflation rate,debt financing ratio and asset economic depreciation have an impact on the effective marginal tax rate through different influence mechanisms,which in turn affects investment behavior.