Research On The Impact Of Labor Marginal Effective Tax Rate On China’s Labor Demand

Based on our working-age population growth slowed,the superiority of the corporate status quo rising labor costs and labor marginal effective tax rate in this calculation tools,the impact of the size of the implementation of government tax incentives for enterprises and employment costs generated by enterprises and the whole society is concerned So the research focus is the impact of tax incentives discussed herein for Chinese enterprises to hire labor willingness topic.This paper adopts the formula calculation method of classic capital cost and uses the tax wedge formula to express the labor tax burden assumed by the enterprise,and combines the two to form a formula about the effective marginal rate of labor.Then,according to the Chinese tax system and social security system,further revisions were made,and the formula for calculating METR suitable for China’s national conditions was obtained.Using the revised METR calculation formula to measure the METR of Chinese listed companies on labor investment,and make a comparative analysis.Based on the analysis of the factors affecting the willingness of enterprises to hire labor,the GMM dynamic panel regression model of the labor marginal effective tax rate affecting the willingness of enterprises to hire labor is constructed.Finally,based on the conclusions drawn from the empirical analysis,policy recommendations are proposed.The research process and results of this paper are mainly reflected in the following points:First,this paper proposes a method for calculating the marginal effective tax rate of labor that is consistent with China’s national conditions.Taking into account the personal income tax,corporate income tax,social insurance premiums and other factors,the capital cost formula is combined with China’s tax wedge formula,and the formula for calculating the marginal effective tax rate of labor is proposed.Second,the correctness of the formula was further verified.The calculation and analysis of the labor marginal effective tax rate of China’s A-share listed companies in2011-2017.The results show that from 2011 to 2013,the marginal effective tax rate for labor is on the rise,and from 2013 onwards,it has basically declined.This is because in the aspect of tax reduction,especially the value-added tax,China began to implement the pilot reform of the business reform in 2012,and until 2016,the comprehensive reform will be realized.The biggest feature of the reform is to reduce the double taxation.A better virtuous circle of society is formed,which is conducive to reducing tax burdens.In terms of fee reduction,the State Council lowered the rates of the three types of social security insurance in 2016,and in 2017 again reduced the social insurance premium rate and the proportion of housing provident fund contributions paid by enterprises.Generally speaking,the effective marginal rate of labor is declining year by year,indicating that for enterprises,tax reduction and fee reduction measures have gradually exerted certain results.However,the trend is relatively stable,basically fluctuating around 12%,indicating that there has not been a major change in the tax policies in recent years,basically in a small scope.Third,the results of the formula calculations are used to study the impact of tax policies on the willingness of companies to hire labor.By constructing the econometric model,the labor marginal effective tax rate,social insurance premium and individual tax factors are considered together,and the regression analysis of static panel and dynamic panel is carried out respectively.Fourth,based on the results of empirical research and China’s specific national conditions,five corresponding policy recommendations are proposed.First,the tax authorities can further standardize the existing tax incentives;second,the government should continue to improve China’s social security system and improve the level of social insurance actuarial;third.continue to accelerate the pace of social insurance payment collection and management system reform;fourth The reform of the micro-mechanism of enterprises should be further deepened,and the development and improvement of the factor market should be further promoted.Fifth,the introduction of a new tax law requires enterprises to respond in a timely manner and review the situation.