Endogenous cyclical corporate tax burden in China
The role of tax quotas and growth targets
Bibliographic Data
| ID | 21543764 |
|---|---|
| Authors | Hongsheng Fang (0000-0002-1531-9263, School of Economics, Zhejiang University Hangzhou China), Minyuan He (0009-0000-9886-5317, School of Economics, Zhejiang University Hangzhou China), Dandan Dang (0000-0003-0477-0187, School of Economics, Zhejiang University Hangzhou China), Jun Zhang (0000-0003-1706-1611, Fudan University Shanghai China, corresponding author) |
| Year | 2020 |
| Volume | 43 |
| Issue | 12 |
| Pages | 3314-3339 |
| Publication date | 2020-12-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | World Economy (JOURNAL) |
| Journal identifiers | ISSN: 0378-5920 • E-ISSN: 1467-9701 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/twec.12958 |
| OpenAlex | W3032946322 |
| Language | EN |
| References cited | 32 |
Using data from China Annual Survey of Industrial Firms and addressing potential endogeneity problem, we find that corporate tax burden in China is procyclical during recessions and countercyclical during booms. The cyclicality is stronger for enterprises whose corporate income taxes are levied by Local Tax Bureau (LTB). Procyclicality of corporate tax burden during recessions is larger for enterprises located in county, non‐state‐owned enterprises (non‐SOEs), non‐high‐tech enterprises and large‐medium enterprises. Furthermore, tax quotas and growth targets of local governments enhance procyclicality during recessions and the countercyclicality of corporate tax burden during booms. Tax collection and government spending are important channels through which tax quotas and growth targets affect the cyclicality of corporate tax burden, respectively. This paper provides important policy implications for China during economic recessions
Boom · Business · China · Corporate Tax · Economics · Endogeneity · Macroeconomics · Monetary economics · Public economics · Recession · Tax avoidance · Tax reform · Value-added tax · Corporate Taxation and Avoidance · Fiscal Policies and Political Economy · Fiscal Policy and Economic Growth
Postwar U.S. Business Cycles
Manufacturing Firms in Developing Countries
Institutional causes, macroeconomic symptoms
Measuring tax effort in developing countries
The Unreliability of Output-Gap Estimates in Real Time
On Adjusting the Hodrick-Prescott Filter for the Frequency of Observations
Cyclical Ratcheting in Government Spending
On graduation from fiscal procyclicality
Tax base variability and procyclical fiscal policy in developing countries
Decentralization and macroeconomic performance in China
Redistribution in a Decentralized Economy
Competition and Corporate Tax Avoidance
| Citation velocity | historical |
|---|---|
| Highly cited | No |