The Impact Of Corporate Tax Burden On Resource Allocation From The Perspective Of High-quality Development

Since the economic crisis in 2008,in order to cope with the volatile international situation and ensure the domestic economic development,the Chinese government has made many important strategic arrangements and policy adjustments,and the tax policy has also been continuously optimized in practice and exploration.It has experienced two major changes: one is from the government dominant production factors flow to giving full play to the advantage of market price signals and let the market plays a decisive role in resource allocation;the other is from simply stimulating factor input to obtain extensive high-speed growth to supply side structural reform,so as to achieve the goal of high-quality economic development.In addition,with the advent of A New Era of Socialism with Chinese Characteristics,the main contradiction in Chinese society is no longer the gap between people's wants and the limits of social production,instead it is “the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life”.In essence,it also requires the economic development to focus on the improvement of “quality” instead of merely pursuing the increase of “quantity” in the past.So,does the tax reduction policy really help to improve the efficiency of resource allocation among enterprises and promote high-quality economic development? This question is related to whether China should implement a larger scale of in taxes and fees cuts,which is worth studying.In 2020,the sudden outbreak of Covid-19 caused a huge impact on the global economic development,and also put forward a test to the smooth operation of the financial system of various countries.In China,the current fiscal operation is facing the double pressure of the decline of fiscal revenue and the growth of rigid fiscal expenditure.In this dual pressure,how to improve the efficiency of the taxes and fees cuts has become crucial.This paper attempts to answer this question from two perspectives: fairness of corporate tax burden and expectation of stable tax burden.These two perspectives are also of practical and theoretical significance to construct the connotation of tax justice under the background of A New Era of Socialism with Chinese Characteristics.Compared with other studies,this paper explores the impact of corporate tax burden(including level,inequality and uncertainty)on resource allocation in a more comprehensive way.Despite of all kinds of specific influence show some heterogeneity,but based on the full empirical results,on the whole,the improvement of enterprise tax burden level,the expansion of tax inequality between enterprises and the increase of uncertainty of enterprise tax burden will have adverse effects on resource allocation,cause the loss of social production efficiency,and hinder the high-quality economic development.The results provide empirical evidence for the implementation of a larger scale of taxes and fees cuts,prove that the equity of enterprise tax burden and the efficiency of resource allocation can be complementary,and also demonstrate the importance of stabilizing enterprise tax burden expectations.Based on these conclusions,this paper tries to construct a frame of tax boundary from the perspective of high-quality economic development,which includes three levels: the boundary of quantity,the boundary of structure and the boundary of tax justice.The paper is consisted of eight chapters,which are mainly composed of four parts: theoretical analysis,indexes measurement and factual characteristics,empirical research and policy suggestions.The main contents and conclusions of each chapter are as follows:Chapter 1 is the introduction,which aims to introduce the research background and significance,the content arrangement and framework system,the research methods and technical routes,the main innovations and shortcomings,as well as the definition of the core concepts.Chapter 2 is literature review.First of all,from a relatively macro historical perspective,this chapter briefly explains the development of relevant literature to clarify the academic positioning of this study in the field of economic growth and development.Then,focusing on the relative micro historical perspective,this chapter introduces the research on the measurement method of resource allocation efficiency and its influencing factors in the past two decades,sorts out the research results of “corporate tax burden ? resource allocation ? high-quality economic development”,and specifically points out the shortcomings of existing research and the concerns of this paper.Chapter 3 is theoretical analysis,including theoretical model and logical analysis.Firstly,based on the HK model and its related extensions,the theoretical model deduces the effects of distorting tax on resource misallocation and production efficiency loss.Then,it makes a logical analysis on how corporate tax burden(level,fairness and certainty)affects resource allocation to put forward the main empirical research hypotheses.Chapter 4 is the analysis of data basis and factual characteristics.This chapter measures the key indicators to provide basic support for the follow-up empirical research,and introduces the status of China's resource allocation and the factual characteristics of corporate tax burden(level,inequality and uncertainty),so as to build a basic understanding of the research topic.Chapter 5 studies the influence of the level of corporate tax burden on resource allocation.First of all,through the basic regression study on the impact of various corporate tax burden on resource allocation,the chapter founds that the impact of corporate tax levels on resource allocation in China mainly shows “tax effect” rather than “governance effect”,and the governance effect may only appear in the influence on the capital allocation among state-owned enterprises.Then,the mechanism study shows that the level of corporate tax burden affects the overall misallocation of resources mainly by impacting the cost of labor rather than the cost of external capital,and affects the misallocation of capital factors by impacting long-term debt financing rather than short-term debt financing.Using the quasi-natural experiment of income tax sharing reform in 2002,we construct a Difference-in-Difference model(i.e.DID model)to discuss the endogeneity questions,which further verifies the robustness of the conclusion.Finally,further research shows that the misallocation of overall resources,capital misallocation and labor misallocation are not conducive to high-quality economic development(measured by the efficiency of production at the level of enterprises and industries),and on the whole,this adverse effect will intensify with the increase of tax burden.Chapter 6 studies the influence of unfair Effective Tax Rate(ETR)on resource allocation.First of all,based on the baseline study to understand the basic situation of the effects of various types of ETR unfairness on resource allocation,it is found that all kinds of ETR unfairness among enterprises in the industry will have adverse effects on the overall resource allocation.Heterogeneity analysis shows that,compared with direct tax,the inequity of indirect tax burden has a greater marginal effect on the overall resource allocation,and also has a robust negative impact on the allocation of capital and labor factors.The unfair direct tax burden only affects the overall resource allocation,but not the allocation of factors,and its influence is only significant in smaller scope,higher level of economic development or deeper degree of marketization.Mechanism analysis which adopts the study design based on dimension reduction ideas to further verify the robustness of the baseline regression results,and discover the inequity of comprehensive tax burden and the inequity of value-added tax burden mainly affect the resource allocation by affecting the probability of incumbent firms' exit from the market,while the inequity of corporate income tax burden mainly affects the resource allocation by affecting the probability of potential firms' entry into the market.Finally,the further study found that all kinds of ETR unfairness among enterprises will hinder the high-quality economic development,and the allocation of resources and factors is an important path of this effect.Chapter 7 studies the influence of uncertainty of corporate tax burden on resource allocation.The chapter constructs an index system to measure the uncertainty of corporate tax burden,including four indexes,such as the fluctuation of ETR,the expected error of ETR,the unexpected turnover of officials and the uncertainty index of tax policy.It is found that no matter what index is used to measure the uncertainty,on the whole,the uncertainty of corporate tax burden will have a negative impact on resource allocation,although there are some differences in the specific impact and heterogeneity analysis.In addition,the unexpected turnover of principal officials at the county level will affect the resource allocation by affecting the expected error of ETR in the current year,and will further hinder the production efficiency upgrade of enterprises and industries,which is not conducive to high-quality economic development.Chapter 8 is the conclusion and policy suggestions.The chapter makes a summary review of the main research conclusions of the full paper,and puts forward three kinds of policy suggestions,including implementing a larger tax reduction to improve the efficiency of resource allocation,promoting fair and stable expectations to improve the effect of tax reduction policies,constructing the boundary of taxes to promote high-quality economic development.