The Effects of Changes in Corporate Income Tax Rate on Labor Employment
Reducing taxes and fees to stabilize businesses and maintain employment is an important focus of the current government work.To explore the crucial practical issue of whether corporate income tax reduction helps stabilize employment and secure livelihoods,this paper attempts to construct a theoretical model to analyze the influence of changes in corporate in-come tax rates on firms'employment decisions.Then it employs the implementation of the 2008 Corporate Income Tax Law as a quasi-natural experiment to conduct empirical tests by using a difference-in-differences model.The results show that a de-crease in the tax rate significantly increased the scale of labor employment in enterprises.Conversely,an increase in the tax rate did not affect the scale of employment in enterprises.Additional analysis indicates that the beneficial effect of lowering the corporate income tax rate on employment is most evident among firms experiencing significant financing constraints,high levels of tax compliance,and those operating in highly competitive product markets.The mechanism analysis indicates that the de-crease in the tax rate promotes corporate investment,which,due to capital-labor complementarity,ultimately leads to an in-crease in the scale of enterprise employment.This study deepens the understanding of the labor employment effects of tax re-duction policies,contributing to the formulation and adjustment of subsequent tax reduction policies.Additionally,it provides policy insights into the tax administration reforms and market-oriented construction.
Corporate Income Tax ReformCorporate Income Tax RateLabor EmploymentCapital-Labor Complementarity
万方数据
维普
