Does The Protection Of Workers Induce Tax Avoidance?

With the rapid development of China's economy and the continuous increase in the total GDP,how to enable all citizens to enjoy the benefit of development has undoubtedly become a more important issue.To achieve this goal,the government has made many efforts.One of the important measures is to strengthen the protection of workers.However,in the process of formulating related policies,we often only pay attention to strengthening the influence of the degree of labor protection on workers,but we ignore the important influence of this policy on enterprises.In fact,the income earned by low-income workers due to the increased protection of workers is not paid by the state,but is paid entirely by the enterprise.Therefore,strengthening labor protection will also increase the burden on enterprises while raising the living standards of workers.Under this background,will companies take certain measures to deal with such unfavorable changes?In order to answer this question,this paper selects the minimum wage standard,an important labor protection policy,as an institutional tool,and uses the data of Chinese listed companies to empirically examine the impact of labor protection on corporate tax avoidance behavior.The study found that the higher the minimum wage in the region where the company is located,the higher the level of tax avoidance in the region.The impact of the minimum wage standard on tax avoidance mainly comes from the impact on the labor cost of the company,and this effect is even more pronounced in companies with higher labor intensity,lower average wages,and weaker cost transferability.Further results show that companies will weigh the benefits and costs of tax avoidance by showing that when the company's tax avoidance risk is lower than other companies,the company will respond to rising minimum wage standards by increasing tax avoidance levels.Conversely,when the tax avoidance risk of a company is higher than that of other companies,the company will not respond to the rise in the minimum wage standard by continuing to increase the level of tax avoidance.Finally,the paper also finds that corporate tax avoidance in the context of rising minimum wage standards can significantly increase corporate value.The full text is mainly divided into seven parts:The first part is introduction.This part mainly elaborates the research background,research significance,research contents and research methods of this article.The second part is a literature review.This part mainly sorts out the current research from the three aspects of the economic consequences of worker protection,the economic consequences of the minimum wage standard,and the influencing factors of corporate tax avoidance,and makes a review on this basis.The third part proposes theoretical analysis and hypothesis.This part first elaborates the theoretical basis related to this article,and then makes a theoretical analysis of why the change of the minimum wage standard affects tax avoidance,and puts forward the research hypothesis.The fourth part is the research design.This section mainly introduces the empirical model,variable definition,sample selection,and data sources.The fifth part is the empirical results and analysis.This section first introduces the descriptive statistics of this paper;secondly,it shows the empirical results obtained through the empirical model,and analyzes the empirical results in detail;finally,it presents the robustness test of the empirical results of this paper.Robustness tests include measures to change corporate tax avoidance levels,further control firm-level fixed effects,use balanced panel data to regress models,consider endogenous issues,control the impact of fiscal policies,control the impact of tax deductions on wages and resolve the problem about the inconsistency between the place of business and the place of registration.The sixth part is for further inspection.This part mainly explores from four aspects.First,this paper tests the mechanism of action mentioned in the theoretical analysis.Second,this paper examines the impact of the increase in the minimum wage on the tax avoidance of companies in different companies.Third,this paper analyzes the background of the rise in the minimum wage.How to weigh the benefits and costs of tax avoidance?Finally,this paper examines whether the increase in corporate tax avoidance due to rising minimum wages has increased the value of the company.The last part is the research conclusions,policy recommendations and deficiencies.This part mainly summarizes the research conclusions of this article,puts forward corresponding policy recommendations and points out the deficiencies of this article.The conclusion of this paper expands the economic consequences of the degree of protection of workers and the relevant academic literature on the reasons for corporate tax avoidance,and thus has important theoretical significance.In addition,the conclusions of this paper also have important implications for policy enlightenment:Labor protection policies,while protecting the rights of laborers,will also increase the burden on companies,thus forcing companies to take measures that may harm the national interest.Therefore,when formulating labor protection policies,policy-making authorities must not only consider the angle of workers,but also fully consider the burden of different companies.Taking the minimum wage system studied in this article as an example,in order to reduce the burden on enterprises,the state can appropriately increase the tax deduction for corporate wages,smooth the increase in the minimum wage,and at the same time,for those labor-intensive companies with a large number of employees,The state can consider giving a certain amount of cash subsidies.These practices can not only protect the rights and interests of the bottom-level workers,but also ease the operational pressures of the enterprises,and they can also safeguard the authority of China's taxation system.