Research On The Incentive Effect Of Corporate Income Tax Preferential Policies On Charitable Donations

Since the reform and opening up,China’s economic development level has been continuously improved,and at the same time,the income distribution gap has also been widening.However,at present,China’s market-oriented first allocation emphasizes efficiency,which only makes the income gap larger and larger,and the government-led redistribution effect is limited.At this time,the importance of the third distribution method is not mentioned.Chinese economist Li Yining proposed the third distribution system,that is,the distribution through personal resource donation under the influence of moral power,that is to say,charitable donation is the third way of distribution.In recent years,China’s philanthropy has made great progress,but there is still a big gap compared with the United States and other countries.In order to encourage corporate charitable donations,China has been working to adjust and improve the corresponding corporate income tax policy.The most recent adjustment occurred in 2017.In line with the tax incentives related to the Charity Law,the Standing Committee of the National People’s Congress revised the relevant provisions of the Corporate Income Tax Law in March 2017,stipulating that the charitable donations of enterprises exceed the total profit of 12 % portion can be deducted within three years after the carry-over.In theory,this adjustment will,to a certain extent,make the cost of charitable donations of enterprises continue to decrease,thus stimulating corporate charitable donations.The main content of this paper is divided into five parts.The first part is the introduction.Firstly,it introduced the research background and significance of this paper.Then it sorts out and reviews the existing related research;then introduced the research methods and research ideas of this paper,and finally pointed out the innovation and shortcomings of this paper.The second part is the analysis of the relevant income tax preferential policies and charitable donations in China.Firstly,analyzed the income tax preferential policies of charitable donations in China which are sorted out in three stages,and then analyzed the status quo of charitable donations in China from the overall donation profile,the charitable donation supply side and the charitable donation demand side.The third part is the theoretical analysis of corporate income tax policy to encourage charitable donation.Firstly,it introduced the theoretical basis of corporate income tax preferential policies to encourage charitable donation,and then analyzed the corporate income tax preferential policy to stimulate the theoretical model of charitable donation,including the profit maximization model and he utility maximization model;finally analyzed the mechanism of the incentive mechanism for corporate income tax incentives to encourage charitable donations by the budget constraint line and the indifference curve.The fourth part is the empirical analysis of corporate income tax policy incentive charitable donation.This part uses the data of listed companies in 2016 and 2017 to analyze the impact of pre-tax deduction policy adjustment.Firstly,based on the above analysis,the research hypothesis of this paper is put forward.Then introduced the variable selection,model setting,variable selection and data source,and then the specific empirical process,including descriptive statistics and correlation analysis,basic regression results,robustness test and further research.Through empirical research,this paper finds the adjustment of the pre-tax deduction policy for charitable donations in 2017 will increase the scale and willingness of charitable donations,and the scale,profitability and property rights of the company will have an impact on the incentive effect of pre-tax deduction policy adjustment.The fifth part summarizes the above research results and proposes corresponding countermeasures.The innovation of this paper lies in the innovation of the research object.Due to the availability of data,there are few studies on the adjustment of the pre-tax deduction policy in 2017.This paper uses the data of listed companies in 2016-2017 to conduct empirical research.The practical application value of this paper is to analyze the adjustments and the shortcomings of the adjustment of the pre-tax deduction of charitable donations in 2017,and propose corresponding countermeasures,such as: optimizing the pre-tax deduction policy and expanding the scope of recipients,simplifying the procedures of tax incentive and the cultivating corporate culture of donation.These countermeasures are important for promoting further reform of relevant tax policies and for developing philanthropy.Further,it plays an important role in regulating income distribution gaps,alleviating social conflicts,and promoting social harmony.