Research On The Effect Of Preferential Tax Policies On Labor Demand Under The Background Of Western Development

Since the reform and opening up,China’s economy has achieved miraculous growth with an average annual growth rate of 10%.However,the problems of unbalanced regional development and uncoordinated regional development are gradually emerging.In order to coordinate regional development,China has constantly issued regional support policies,especially the western development policy.After China’s economic development has entered the new normal,facing the severe situation of declining domestic economic growth and complex international environment,the central government has continuously introduced tax reduction measures.The unexpected epidemic situation in 2020 makes the depressed economic situation more serious.The Party Central Committee puts the task of stabilizing employment and protecting people’s livelihood in a higher position.As an important measure for the government to control the economy,it is of great significance to evaluate whether the tax policy really produce a marked effect in promoting employment and improving people’s livelihood.The western development policy has been implemented for nearly 20 years,which has been an important strategic deployment to break through the regional endowment restrictions and narrow the regional development differences.Under the background of the slow national economic recovery and the complex international situations,this paper analyzes the mechanism of tax incentives on labor demand,evaluates the implementation effect of the western development strategy,finds out its existing problems and causes,which is not only conducive to the improvement and development of the policy,but also promotes the development of other preferential tax policies.Under the goal of stabilizing employment and protecting people’s livelihood,it shall promote balanced development between regions and improve the quality and efficiency of taxation.From the theoretical and empirical perspectives,combined with the tax theory and industrial agglomeration effect,this paper analyzes the effect of the western development tax preferential policies on labor demand,and uses the changes in the labor market and the data of employees of listed enterprises to evaluate the results of its impact on the labor demand,analyzes the causes of the problem from multiple perspectives,and grasps the crux of the problem,so as to put forward some countermeasures and constructive suggestions for policy improvement.The specific content consists of five parts: the first part is the introduction,mainly including the research background and significance,domestic and foreign literature review,research ideas and framework,innovation and shortcomings.The second part is the theoretical basis of regional preferential tax policies affecting labor demand.It analyzes the effect mechanism of tax policies on labor demand by combining the classical tax theory,micro and macro effect of enterprise income tax on labor demand and industrial agglomeration effect.The third part is the evaluation and analysis of the western development strategy affect on labor demand.It analyzes the transmission mechanism of the preferential tax policies of the western development affecting the labor demand from the theoretical point of view,and analyzes the changes of the national labor market and the regional labor market from the practical point of view.The fourth part is the empirical analysis of the tax preferential policies of western development affecting labor demand.The paper uses the difference-in-differences model to evaluate the tax reduction effect and employment effect of the western development policy as a whole,and then subdivides the enterprise type to analyze the causes and problems of the impact results.The fifth part is the research conclusions and policy suggestions.It summarizes the research conclusions,clarifies the crux of the problem,and bring forth suggestions to improve the western development strategy and other tax preferential policies.The main findings are as follows:(1)In theory,the policy of developing the western region will stimulate labor demand and improve the labor market situation in the western region by reducing the tax burden of enterprises.It will promote enterprises to expand reproduction,attract capital inflow and accelerate industrial agglomeration.However,tax reduction will produce substitution effect at the same time,which is not conducive to the improvement of the labor market in the western region.After the implementation of the new enterprise income tax law in 2008,the tax reduction effect is reduced,and the employment promotion effect is not as good as expected.(2)The preferential tax policies for the development of the western region have poor performance in attracting investment,due to insufficient preferential treatment for foreign-funded enterprises and insufficient attraction for newly established enterprises.The purpose of expanding labor demand and forming industrial agglomeration by attracting new enterprises has not been achieved.(3)The threshold of tax preferential policies for the development of the western region is too high,and the response of preferential objects to labor demand is not as good as expected.The capital substitution effect of reducing tax burden on the encouraged industrial enterprises is stronger,which means enterprises are more inclined to increase fixed asset investment to improve production efficiency rather than increase labor investment.Therefore,on the whole,the positive impact of tax preferential policies on labor demand in the western development is not as expected,and the policy goal has not been achieved.The conclusion of this paper has a very important practical significance for insight into the transmission barriers of western development tax preferential policies affecting labor demand,and further improve tax preferential policies to promote regional coordinated development and improve the quality and efficiency of tax revenue.