Research On The Influence Of Income Tax Burden On Corporate Donation

In recent years,the third distribution has become a focal topic of the whole society,and charitable giving,as the main way of the third distribution,can play an active role in regulating the income distribution gap as a supplement to the first two distributions.Among them,corporate donation should occupy a dominant position and take the initiative to assume social responsibility and mission,and how to mobilize this enthusiasm is the content of many scholars’research.From a macro perspective,a series of preferential policies introduced by the government provide the premise for corporate donation,while the specific corporate donation behavior depends on micro factors,one of which is taxation.First,based on the theory of strategic charitable giving and the theory of profit maximization and utility maximization,this paper reveals the existence of a non-linear relationship between corporate donation and the effective income tax rate,an inverted U-shaped relationship,and analyzes the correlation between corporate donation and the effective income tax rate more intuitively by constructing a mathematical model.On this basis,we further explain that the mechanism of the inverted-U relationship mainly stems from the two mediating variables of financial leverage and total factor productivity,and theoretically analyze the influence of income tax burden on corporate donation under different scenarios.Second,this paper selects data of 3482 listed companies from 2011 to 2020,and uses the effective income tax rate as the core variable to describe the typical facts and explore the relationship between corporate donation,the propensity to donate and its relationship.It is found that corporate donation initially increases with the increase of effective income tax rate,but when the effective income tax rate reaches around 23.58%,there is an obvious inflection point when corporate donation decreases with the increase of effective income tax rate.Third,this paper uses a two-way fixed effects model to verify the above non-linear relationship.The regression results show that there is an inverted U-shaped relationship between both the amount of corporate donation and the propensity to donate and the effective income tax rate,and the effective income tax rate of the majority of participating companies lies to the left of the inflection point,which means the amount of corporate donation increases with the increase in the effective income tax rate and the propensity to donate increases with the increase in the effective income tax rate.This finding holds after a series of endogeneity and robustness tests.An endogenous mediating effect model is constructed to find that the effecti ve income tax rate has an impact on the behavior of corporate donation mainly through financial leverage.The heterogeneity tests based on the nature of ownership,profitability,power structure,industrial policy and life cycle stage further find that the inverted U-shaped relationship between the effective income tax rate and corporate donation is more significant for non-state owned enterprises,enterprises with higher levels of profitability,enterprises with two separate jobs,non-priority supported enterprises and enterprises in decline,and the corporate donation is more sensitive to changes in the effective income tax rate.Finally,according to the conclusion of this paper,it is recommended to improve the tax incentives for corporate donation,strengthen tax collection and management,and foster corporate social responsibility to promote the enthusiasm of corporate donation,sometimes a single "burden reduction" may not achieve the desired goal,"grace and power" is the long-term solution.