A Comparative Study On The Tax Burden Of Manufacturing Enterprises In China And The United States

As our country’s largest industry and an important part of the national economy,the manufacturing industry’s rapid development in the past mainly benefited from cost advantages.However,in recent years,with the increase in labor costs,the cost advantages have been gradually reduced.In the context of the general decline in manufacturing profitability,how to further optimize taxation policies and enhance the international competitiveness of manufacturing enterprises is an important topic that needs to be studied.Existing scholars’ comparative studies on taxes and fees between China and the United States mostly remain at the national level,and only consider the relatively large value-added tax,corporate income tax and other taxes.They have not considered that various non-tax charges such as social insurance premiums also bring to enterprises.The actual burden of manufacturing enterprises cannot be accurately revealed.In order to explore the above-mentioned issues,this article takes social insurance premiums and various funds and administrative fees submitted to the government into the consideration of corporate tax burden.First,explain the overall situation of the tax system and tax distribution of the two countries,then the tax and the fee system are analyzed theoretically.At the same time,the tax burden of the manufacturing industry is estimated,and representative manufacturing companies with the same business operations in the two countries are selected as the case company.Based on the analysis and calculation of the tax burden of the companies in the two countries in the past five years,the case company’s tax burden is analyzed in detail.The tax situation and the reasons for the difference,understand the general difficulties that Chinese manufacturing companies have in paying taxes,and explore the areas where relevant tax policies can be improved.The research in this article finds that the tax burden of Chinese manufacturing enterprises is slightly higher than that of the United States under the large-scale scope,and the gap has continued to narrow in recent years.Only in the case of the company,it has been lower than the United States.Since 2017,the burden of manufacturing enterprises has shown a clear downward trend,which shows that various preferential policies implemented after the VAT reform have indeed benefited manufacturing enterprises.Specifically,the difference in tax burden between the two countries is mainly due to the value-added tax.It is difficult for companies to pass on the value-added tax burden completely,and the remaining tax credits cannot be fully refunded,which creates additional capital costs;as for the income tax burden,the burden on advanced manufacturing companies with high-tech qualifications is relatively light.The current series of policies also help encourage companies to continue to innovate.However,when new overseas subsidiaries are established,the policy that the losses of parent and subsidiary companies cannot complement each other also creates a certain amount of capital for the company.From the perspective of social insurance premiums,China’s corporate burden is relatively heavy,and the nominal tax rate is nearly twice higher than that of the United States.The burden of pension insurance and medical insurance in particular is relatively large,which squeezes corporate profits to a large extent,and there are still fee reductions space.Based on the above analysis,this article proposes the following policy recommendations: increase financial support,speed up the process of taxation legislation,and introduce fiscal and tax policies that promote the development of advanced manufacturing;further streamline the value-added tax rate and lower the threshold for tax refund;extend the loss recovery period and explore Mechanisms for sharing losses between parent and subsidiary companies;exploring the establishment of a property tax system;advancing the reform of social insurance premiums to taxes,appropriately reducing nominal payment rates,and standardizing administrative charges.