Impacts Of Marginal Effective Tax Rate On Fixed Asset Investment

Investment in fixed assets can improve the production capacity of enterprises,enhance the development strength of enterprises,and promote the transformation and upgrading of industrial structure.Enterprises consider tax burden when making investment decisions,and the tax burden level of enterprises will affect the scale of fixed asset investment.Since 2014,China has introduced a series of preferential tax policies to encourage enterprises to invest in fixed assets.Under the policy background of tax reduction and fee reduction,it is of great significance to study the situation of corporate tax burden and the effect of the current tax policy on guiding corporate investment in fixed assets,and to put forward some suggestions on encouraging corporate investment according to the reality.At present,domestic researches mainly use the average tax rate to measure the tax burden,while foreign researches mainly use the marginal effective tax rate to measure the tax burden of enterprises.Marginal effective tax rate reflects the tax burden level of marginal investment and takes tax factors and non-tax factors into consideration.It is suitable for extensive analysis of marginal investment.Therefore,it is more suitable for studying the incentive effect of tax on investment than the average tax rate.In view of this,this paper chooses to use the marginal effective tax rate to measure the tax burden faced by enterprises when making investment.In theory,on the basis of summarizing the existing research results of domestic and foreign scholars on tax and investment,this paper selects marginal effective tax rate as the mechanism analysis index of tax impact on investment level.Then it introduces the concept and characteristics of marginal effective tax rate.Then,with the help of the revised marginal effective tax rate model and combining with the characteristics of our tax system,many kinds of taxes,such as enterprise income tax,value-added tax and individual income tax,are brought into the marginal effective tax rate model for fixed assets investment.The calculation formula of marginal effective tax rate suitable for investment in our country is deduced.In the empirical aspect,considering that the manufacturing industry,as a typical capital-intensive industry of fixed assets,has the highest proportion of fixed asset investment in the whole society(excluding rural households)and the highest proportion of industrial output value added,the manufacturing enterprises are selected as the research object.Then the variable in the derived marginal effective tax rate formula is defined,and the accelerated depreciation policy introduced in the period is taken into account,which is different from the previous research.Then,the overall situation of the marginal effective tax rate of manufacturing investment from 2013 to 2020 is calculated,and the marginal effective tax rate is further analyzed according to the industry,property nature and region of the enterprise.Then,using the measured data to carry out empirical research,analyze the impact of the reduction of marginal effective tax rate on the scale of fixed asset investment,and conduct heterogeneity test according to the different regions of enterprises and the nature of enterprises.In order to enhance the credibility of the conclusion,this paper conducted a robustness test by reducing the sample data and replacing the explained variables.Through the research,the conclusions of this paper are as follows: First,the marginal effective tax rate will have a significant decline from 0.15 to 0.1 from 2013 to2020,a decline of about 33%.The introduction of accelerated depreciation policy plays a crucial role in reducing the marginal effective tax rate.The accelerated depreciation policy reduces the cost of capital by increasing the present value of the asset’s future depreciable amount and the tax offset by the present value of the depreciation amount,thus reducing the marginal effective tax rate.The empirical study shows that the reduction of marginal effective tax rate has a significant effect on promoting fixed investment.Since the reduction of marginal effective tax rate is mainly due to the introduction of accelerated depreciation policy,it can be considered that accelerated depreciation policy plays a key role in guiding enterprises to expand the scale of investment in fixed assets.Second,the reduction of marginal effective tax rate has heterogeneity in promoting corporate fixed asset investment,mainly affecting non-state-owned enterprises and enterprises in central and western regions.Third,the marginal effective tax rate of the enterprise will be different depending on the industry,property nature and region.Specifically,the electrical machinery and equipment manufacturing industry has the lowest marginal effective tax rate,while the pharmaceutical manufacturing industry has the highest marginal effective tax rate.The marginal effective tax rate of non-state owned enterprises is higher than that of state owned enterprises;The western region has the lowest marginal effective tax rate,while the central region has the highest marginal effective tax rate.According to the research conclusions,this paper puts forward relevant policy suggestions: reduce the difference of tax burden,and give full play to the guiding role of tax policy;Expand the scope of application of accelerated depreciation policy and enhance its preferential intensity;Diversified forms of tax incentives to reduce investment costs.