Research On Impact Of Political Connection On Tax Burden Of Private Enterprises

In recent year,with the rapid development of tax system reform,more and more attention has been paid to corporate tax burden.However,most scholars only focus on external factors,such as regions,industries when considering the impact of tax burden,while there is little research on the impact of political connections on corporate tax burden.It is a common phenomenon in many countries that private enterprises actively seek ties with the government,especially our country is in the period of economic transformation.During this period,China's market and legal system are not mature enough so that political connection plays an important role in the development of enterprises.Existing research shows that political connection may increase corporate tax burden,which means "political cost effect".It may also reduce corporate tax burden,which can be called "political rights effect".Therefore,it is necessary to study the impact of political connection on the tax burden of private enterprises.Firstly,this paper theoretically analyses the effect mechanism of the relationship between government and the private enterprises,and puts forward three hypotheses.Then,this paper selects all listed private enterprises in Chinese A stock market from 2016 to 2018 as samples of multiple linear regression analysis,respectively exploring relationship between political connection and tax burden of private enterprises;relationship between the strength of political connection and tax burden of private enterprises;the impact of political connection on tax burden of listed private enterprises in different regions;the impact of political connection on the tax burden of enterprises at different stages of development.From the study,we can get three conclusions:(1)Political connection can reduce the private enterprises' tax burden,and the stronger the political connection is,the more significant the effect of tax reduction is.(2)External governance environment will affect the relationship between political connection and corporate tax burden.The more backward the economic development is,the more remarkable the effect of reducing corporate tax burden is.(3)Establishing political connection in the initial stage,growth stage and recession stage will reduce private enterprises' tax burden,while establishing in the mature stage can increase the tax burden.In addition,multiple linear regression analysis is carried out annually to verify that the influence of political connection on the private enterprises' tax burden is weakening day by day.Finally,I put forward the corresponding political suggestions according to the research conclusions.