scholarly journals INCOME TAX PREFERENCE AND R&D INVESTMENTS OF HIGH-TECH ENTERPRISES IN CHINA

2021 ◽  
Vol 24 (4) ◽  
pp. 156-173
Author(s):  
Wunhong Su ◽  
Yi-Hao Fan
Keyword(s):  
Income Tax ◽  
Positive Relationship ◽  
High Tech ◽  
Tax Rate ◽  
Tax Preference ◽  
Market Competitiveness ◽  
Innovative Environment ◽  
Rate Policy ◽  
New Perspective ◽  
Tax Deduction

This study explores the relationship between income tax preference and R&D investments of high-tech enterprises. This study selects listed high-tech enterprises in China from 2013 to 2018 as samples. The empirical results show that the effective income tax rate among high-tech enterprises in China differs widely. The findings suggest that high-tech enterprises in China have to take advantage of preferential income tax, pay more attention to R&D investments, and strive to improve R&D ability and market competitiveness. In addition, there is a significantly positive relationship between income tax preference and R&D investments of high-tech enterprises, indicating that the preferential tax rate policy and other tax incentives such as additional tax deduction increase R&D investments of high-tech enterprises effectively. State-owned enterprises (SOEs) are enterprises in which the state has ownership or control over its capital. The positive relation between income tax preference and R&D investments of hightech enterprises is more significant for non-SOEs. Non-SOEs have stronger governance efficiency. Therefore, SOEs should make better use of income tax preference and improve innovation enthusiasm. Moreover, this study finds a more positive relationship between income tax preference and R&D investments among high-tech enterprises in the introduction phase than in the growth and mature phases. However, the relation between income tax preference and R&D investments is insignificant for high-tech enterprises in the decline phase. The findings seem to provide a new perspective for the life cycle characteristics of enterprises and the theoretical guidance to enterprises in phases of growth, mature and decline to develop R&D investments better. Finally, loss enterprises or enterprises in geographical units with the innovative environment are eliminated in this study to avoid extra interference. The results remain robust, indicating that preferential income tax policies applied in high-tech enterprises are significantly and positively associated with R&D investments.

scholarly journals Analysis of Depreciation Policy Based on Effective Tax Rate

2015 ◽  
Vol 4 ◽  
pp. 21-23 ◽  
Author(s):  
Krishna Kumar Shah
Keyword(s):  
Policy Maker ◽  
Tax Policy ◽  
Income Tax ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Wear And Tear ◽  
The Government ◽  
The Cost ◽  
Tax Deduction

Depreciation is an income tax deduction that allows a tax payer to recover the cost. It is an annually allowance for the wear and tear, deterioration or obsolesce of property .With the introduction of income tax Act 2002 the government claimed that the depreciation rule under the new law is more generous than the depreciation rule in 1992 in case of all the assets including machinery and building. This article compares Effective Tax Rate (ETR) which shows no decrease in 2002 in compassion to 1992 in ETR. It means the depreciation rule of 2002 in case of building and machinery is not generous as claimed by the tax policy maker. In contrary to this, the analysis shows that the depreciation provision of 1992 and 2002 are more liberal than the depreciation provision of 1982.DOI: http://dx.doi.org/10.3126/av.v4i0.12352 Academic Voices Vol.4 2015: 21-23

scholarly journals Research on the Individual Income Tax-Deferred Commercial Endowment Insurance from the Perspective of Fairness

2022 ◽  
Vol 2022 ◽  
pp. 1-11
Author(s):  
Tingshan Song ◽  
Huilin Zhu ◽  
Jinrui Xiao ◽  
Zhi Qiao ◽  
Wenguang Yu ◽  
...  
Keyword(s):  
Income Tax ◽  
Endowment Insurance ◽  
Individual Income ◽  
Tax Rate ◽  
Tax Preference ◽  
Income Groups ◽  
Individual Income Tax ◽  
The Rich ◽  
The Individual ◽  
Two Parameters

In order to alleviate the pressure of the basic endowment insurance system, China has implemented the policy of individual income tax-deferred commercial endowment insurance (IITDCEI) and actively explored the development path of individual supplementary endowment insurance. At present, the same tax rules are adopted for different income groups. Considering that people's income gap is large, different income groups enjoy different degrees of tax preference under this policy, which may cause social injustice and increase the gap between the rich and the poor. Based on this, we propose a new optimization scheme by adjusting the tax rate and the maximum premium limit of the insurance amount so as to coordinate the interests of low-, medium-, and high-income subjects and balance the degree of tax preference among the three subjects. At the same time, we also change the two parameters of the predetermined interest rate and retirement age, and compare the changes of the tax preference under the old and new schemes, and provide corresponding countermeasures for the implementation of the IITDCEI policy.

scholarly journals Evolutionary Game Analysis of the Innovation Behavior of High-Tech Enterprises with Government Participation

2021 ◽  
Vol 2021 ◽  
pp. 1-15
Author(s):  
Chen Gong ◽  
Jian Liu ◽  
Jinping Chang
Keyword(s):  
Income Tax ◽  
Evolutionary Game ◽  
Corporate Income Tax ◽  
High Tech ◽  
Marginal Effect ◽  
Tax Rate ◽  
Innovation Activities ◽  
Innovation Ability ◽  
Internal Mechanism ◽  
Enterprise Innovation

High-tech enterprises, as the key subjects that can stimulate innovation vitality and promote innovation-driven development strategies in China, require government guidance for their innovative activities. However, the existing research has not answered the issue of how the government behavior activates the innovation ability of high-tech enterprises and what is the internal mechanism. As such, this paper takes government participation in high-tech enterprises as its research object, constructs an evolutionary game model of government participation in enterprise innovation, analyzes the internal mechanism of improvements to high-tech enterprises’ innovation ability under government tax and fee policy incentives and regulatory measures, and uses MATLAB numerical simulation to verify the results. The research shows that (1) increasing the general corporate income tax rate and reducing the high-tech corporate income tax rate can promote the transformation of general enterprises into high-tech enterprises and encourage enterprises to engage in scientific and technological innovation activities. However, when the high-tech corporate income tax rate is lower than 0.1, the marginal effect will be reduced. (2) Increasing the deduction coefficient and amortization coefficient can make high-tech enterprises more motivated to participate in innovation activities and thus render enterprise innovation more lucrative. (3) Increasing administrative penalties from regulatory authorities can promote the development of innovative activities in high-tech enterprises, but their intensity must be controlled within a reasonable range. The presented results have reference value for the adjustment of tax and fee policies among high-tech enterprises.

Taxation in a mixed economy: the case of China

2017 ◽  
Vol 34 (1) ◽  
pp. 49-61 ◽  
Author(s):  
Davidson Sinclair ◽  
Larry Li
Keyword(s):  
Income Tax ◽  
Central Government ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Government Ownership ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Content Type ◽  
Tax Rate ◽  
For Profit

Purpose The purpose of this paper is to investigate how Chinese firms’ ownership structure is related to their effective tax rate. The People’s Republic of China provides an interesting environment to examine the corporate income tax. Government has significant ownership stakes in the for-profit economy and state-owned enterprises (SOEs) are liable to the corporate income tax. This is very different to most other economies where SOE tends to dominate the not-for-profit economy and pays no corporate income tax. Government ownership also varies between the central government and local government in addition to state asset management bureaus. This provides a rich institutional background to examining the corporate income tax. Design/methodology/approach A panel data analysis approach is used to examine relationship between ownership structure and effective tax rates of all public firms in China from 1999 to 2009. Findings The authors report that effective tax rates do appear to vary across the ownership types, but that SOEs pay a statistically higher effective tax rate than to non-state-owned. In addition, local government owned SOE pay higher effective tax rates than central government and SAMB owned SOE. The authors also investigate Zimmerman’s (1983) political cost hypothesis. Unfortunately, these results are econometrically fragile with the statistical significance of those results varying by empirical technique. Originality/value This paper provides insight into government ownership and taxation in China.

scholarly journals Taxing Capital? Not a Bad Idea After All!

2009 ◽  
Vol 99 (1) ◽  
pp. 25-48 ◽  
Author(s):  
Juan Carlos Conesa ◽  
Sagiri Kitao ◽  
Dirk Krueger
Keyword(s):  
Income Tax ◽  
Labor Income ◽  
Income Shocks ◽  
Capital Income ◽  
Overlapping Generations Model ◽  
Cycle Structure ◽  
Tax Rate ◽  
Average Household Income ◽  
Optimal Capital

We quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic, uninsurable income shocks and permanent productivity differences of households. The optimal capital income tax rate is significantly positive at 36 percent. The optimal progressive labor income tax is, roughly, a flat tax of 23 percent with a deduction of $7,200 (relative to average household income of $42,000). The high optimal capital income tax is mainly driven by the life-cycle structure of the model, whereas the optimal progressivity of the labor income tax is attributable to the insurance and redistribution role of the tax system. (JEL E13, H21, H24, H25)

scholarly journals Study on the Factors Affecting the Financing of High-Tech SMEs

2017 ◽  
Vol 13 (8) ◽  
pp. 121
Author(s):  
Mingjun Zhu
Keyword(s):  
Positive Relationship ◽  
Significance Test ◽  
High Tech ◽  
Negative Effects ◽  
Factors Affecting ◽  
Enterprise Growth ◽  
Tax Shield ◽  
Debt Tax Shield ◽  
Major Factors ◽  
Tangible Asset

High-tech small and medium-sized enterprises (SMEs) have played an important role in promoting the development of Chinese national economy, but most of them are still facing the difficulty in financing. This paper determines the major factors affecting the financing for high-tech SMEs by using multiple linear regression (MLR) method and significance test then comes to a conclusion that enterprise scale, enterprise growth, tangible asset ratio and equity liquidity have positive relationship with the financing of high-tech SMEs while profitability, accumulation, non-debt tax shield and solvency have negative effects.

scholarly journals Victory Tax: A Holistic Income Tax System

Entropy ◽  
2021 ◽  
Vol 23 (11) ◽  
pp. 1492
Author(s):  
Donald J. Jacobs
Keyword(s):  
Income Tax ◽  
Free Market ◽  
Poverty Line ◽  
The United States ◽  
Effective Tax Rate ◽  
Tax System ◽  
Tax Rate ◽  
Single Tax ◽  
Government Transfer ◽  
Log Normal

How can an income tax system be designed to exploit human nature and a free market to create a poverty free society, while balancing budgets without disproportional tax burdens? Such a tax system, with universal character, is deduced from the following guiding principles: (1) a single tax rate applies to all income types and levels; (2) the tax rate adjusts to satisfy budget projections; (3) government transfer only supplements the income of households with self-generated income below the poverty line; (4) deductions for basic living expenses, itemized investments and capital losses are allowed; (5) deductions cannot be applied to government transfer. A general framework emerges with three parameters that determine a minimum allowed tax deduction, a maximum allowed itemized deduction, and a maximum deduction defined by income percentage. An income distribution that mimics the United States, and a series of log-normal distributions are considered to quantitatively compare detailed characteristics of this tax system to progressive and flat tax systems. To minimize government dependency while maximizing after-tax income, the effective tax rate (ETR) as a function of income percentile takes the shape of the letter, V, inspiring the name victory tax, where the middle class has the lowest ETR.

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