The Effect Of Minimum Wage Standard On Corporate Tax Evasion

As an important labor protection policy,on the one hand,the minimum wage system can enhance the income level of low-income groups,improve their quality of life,thus safeguarding social fairness and justice.But on the other hand,the increase of the minimum wage standard will also increase the operating burden of enterprises,affect their ability to bear risks,and thus affect the interests of enterprises.In this context,whether enterprises will take certain means to deal with the impact of the minimum wage system on its own?If so,how will companies respond to such shocks?Based on the above thinking,thesis takes the data of Chinese industrial enterprises from 2003 to 2007,probes into the mechanism and effect of minimum wage system on tax evasion and the moderating effect of tax collection intensity on the relationship between them.Furthermore,this thesis analyzes the heterogeneity based on different regions,different ownership,factor intensity and scale,and finally studies the possible influence mechanism.The results show that:(1)the higher the minimum wage standard,the higher the degree of tax avoidance;(2)The tax collection and management can effectively play the role of supervision and punishment,that is,in areas where the intensity of tax collection and management is high,the impact of the rise of the minimum wage standard on corporate tax avoidance is weak,and vice versa;(3)the effect of the increase of the minimum wage is more obvious in the private,labor-intensive and small-scale enterprises,which are difficult to pass on the cost;(4)with the increase of the minimum wage,enterprises tend to reduce labor force and use more capital instead.capital-labor ratio is a possible channel for enterprises to avoid tax by raising the minimum wage.The conclusion of this thesis broadens the economic consequences of labor protection and the related literature on the factors of enterprise tax avoidance,which has certain theoretical significance.In addition,the conclusion also has certain Policy Enlightenment:When the government formulates the labor protection policy,should not only from the laborer’s angle,but also should take full account of the enterprise’s burden level,avoid the occurrence of enterprises due to pay excessive labor costs and endanger the normal production and operation of the situation.For example,the government could further increase the tax credit to smooth the rise in the minimum wage.For those with higher labor intensity and lower risk tolerance,may consider giving certain subsidies and tax incentives and so on.