What kind of impact does tax policy have on employment in our country

On the impact of taxation on employment Employment is an important issue in social and economic development, taxation as a means of national income distribution and macro-control of the economic lever, the level of employment and the adjustment of the employment structure have a certain impact. This paper starts from the analysis of the effect of taxation on labor supply and labor demand, discusses the impact of tax policy on employment, and puts forward the tax policy ideas and specific countermeasures to promote the employment work in China.　　Employment, refers to the labor force is in the state of employment or engaged in a job that can get paid. Taxation, as a means of distribution of national centralized income and an economic lever for macro-control, has a certain impact on the level of employment and the adjustment of employment structure.　　I. Taxation affects labor supply (a) The income effect and substitution effect of taxation affect people's choices of work and leisure From a macro point of view, the total labor supply refers to the total amount of labor that all workers are willing and able to provide in a certain period of time, which depends on the size of the population, the ratio of the working population to the total population, and so on. At the micro level, the decision on labor supply depends again to a large extent on individual workers. In a planned economy, although the state can allocate labor resources by deciding the labor hours and jobs for workers, it cannot control the amount of labor, i.e., it is difficult to make workers give the maximum amount of labor per unit of labor time. In a market economy, workers' choices about labor and income include whether to work, how much to work, and where to work. These choices are really choices between working for income and leisure. People's standard of living can actually be measured in terms of both income, which denotes the quantity and share of goods or services they own, and leisure, which denotes the amount of free time they have. Given leisure, the higher the income, the higher the standard of living, and given income, the more leisure, the higher the standard of living. However, to gain income one has to give up leisure, and to gain leisure one has to reduce income. How the two are combined depends on: people's preferences for income and leisure; the level of the wage rate, i.e., how much income can be gained by giving up leisure; and the level of other incomes unrelated to labor, such as capital income and social security income. These choices indicate that the amount of labor supply is due, in the first place, to people's choices about income and leisure, and that if more choices are made to give up leisure in favor of income, labor supply increases, and vice versa.　　The effect of taxation on labor supply is mainly expressed in the income effect and substitution effect on labor. The income effect is that the imposition of taxes reduces the disposable income of individuals, prompting them to reduce or give up their leisure and increase their working hours in order to maintain a given level of income and consumption. The substitution effect refers to the change in the price of labor and leisure as a result of taxation, with labor income falling and the price of leisure decreasing, prompting people to choose leisure as an alternative to work. These two effects of taxation on labor, if the income effect is greater than the substitution effect, taxation on labor supply is an incentive, which prompts people to increase work to increase labor; if the income effect is less than the substitution effect, taxation on labor supply will form an excess burden, people choose to leisure instead of labor, reduce labor. From the point of view of tax types, the most obvious impact of taxation on labor supply is personal income tax, because personal income tax is levied directly on people's income, including wages, which changes people's after-tax disposable income, thus affecting people's choice of work and leisure. In addition, the imposition of commodity taxes, such as consumption taxes, raises the price of commodities and reduces the real purchasing power of a given amount of monetary wages, which also affects people's choices between work and leisure. In terms of the tax base, an income tax on labor income alone, such as a tax on wages, produces a greater substitution effect than a general income tax on general income; taxing non-labor income while exempting labor income avoids the excess burden of taxation on the supply of labor. In terms of tax rates, progressive tax rates have the greatest impact, and the higher the degree of progressivity, the greater the excess burden.　　(ii) tax policy affects the human resources base and labor quality ① human resources and employment issues are extremely close links, on the one hand, as the human resources formation of the base population, affecting the labor supply, on the other hand, human resources on the socio-economic development of the society plays a major role in promoting the objectively may be due to the economic development of the increase in employment opportunities and the demand for labor.　　② Many scholars believe that the deduction of employee education and training expenses in corporate income tax should be extended to personal income tax.　　Second, taxation affects labor demand ③ So reducing labor supply is a long-term strategy. The solution to the employment problem is, to a greater extent, to increase the demand for labor. Labor demand should include total demand and demand structure, and the impact of taxation on labor demand also includes these two aspects.　　Aggregate labor demand refers to the total number of job openings that society is willing and able to provide in a certain period of time, or the total number of laborers that all economic sectors are willing and able to employ, which mainly depends on the level of economic development of the society. The impact of taxation on the aggregate demand for labor is mainly manifested in the use of tax regulation measures to stimulate investment, promote production development, and increase employment opportunities. On the whole, the stimulating effect of taxation on private investment is realized by adjusting tax types, changing tax rates, tax concessions and other measures. For example, investment credits, accelerated depreciation, and loss carry-forwards are allowed in corporate income tax; tax breaks and preferences are given to emerging industries; and tax breaks and preferences are implemented for industrial sectors and enterprises that attract more labor. The size of tax revenue is a direct influence on the size of government investment, and when the government uses tax revenue to increase public **** investment, it is certain to increase employment opportunities. At the same time, a portion of both personal income tax and social security tax levied on high income earners will be used for social relief and welfare expenditures as a result of their diversion, thus increasing the purchasing power of the society and raising the effective demand of the society, and at the same time, favoring the increase of the employment level.　　The solution to the employment problem requires not only an increase in aggregate labor demand, but also an adjustment of the structure of labor demand to increase jobs and opportunities. The study of the employment problem includes not only the total amount of employment, but also the structure of employment, because unemployment includes structural unemployment, cyclical unemployment, frictional unemployment and so on. Among them, the structural unemployment problem is also increasingly troubling the society, on the one hand, there is idle labor force, on the other hand, there are vacant positions but no one is qualified for them. To solve structural unemployment, in addition to changing the labor supply structure by improving the quality and skills of the labor force, more need to adjust the demand structure. The so-called labor demand structure mainly refers to the composition of demand due to the different requirements for labor skills in different jobs. In the case of a lower level of education, lower quality of the population, and lower skills of the labor force, too high a demand for labor skills will increase unemployment. Therefore, the adjustment of labor demand structure is to make reasonable changes in the demand for jobs with different skill requirements according to the requirements of economic development and labor market conditions under the premise that the total labor demand is certain, so as to solve the employment problem to the maximum extent without affecting the long-term development of the economy. The impact of taxation on the structure of labor demand is mainly manifested in the cooperation with the national industrial policy, which gives certain tax concessions to industries and sectors that are conducive to economic development and can absorb a larger number of laborers, in order to encourage them to absorb and arrange laborers while they are developing. At the same time, the imposition of social security tax will likely play a moderating role in the short-term turmoil of massive labor force unemployment brought about by industrial restructuring. The introduction of a negative income tax system will have a similar effect.　　III. Ideas and Tax Countermeasures to Solve the Employment Problem (I) Ideas to Solve China's Employment Problem 1. Effective Employment - Employment Approach in the Socialist Market Economy. Under the socialist market economy, the government's functions have been transformed, and it will no longer directly manage the operation of enterprises (including labor arrangements). The traditional employment model, whether in theory or in practice, can no longer meet the needs of the socialist market economy. According to the objective needs of China's socialist market economy, and taking into account the characteristics of China's employment situation, the approach to the employment problem in China should be effective employment. Effective employment emphasizes two aspects: first, while recognizing that it is impossible to achieve a 100 percent high employment rate, it improves labor efficiency and allows workers in the whole society to use their own labor efficiently. The second is to strive for the optimal combination of higher labor efficiency and better social benefits, to create more employment opportunities, and to gradually and effectively solve the unemployment problem.　　2. Economic development - the fundamental way to employment in a socialist market economy. The fundamental way to solve the employment problem is to develop production and expand employment. The total demand for labor depends fundamentally on the level of economic development. The faster the economy develops, the greater the demand for labor and the higher the employment rate. Stable economic development is also a basic guarantee of a stable level of employment. Great ups and downs in economic fluctuations are bound to bring about cyclical unemployment and affect social stability. Utilizing the policy of total tax revenue and applying the policy of total tax revenue changes can have a certain slowing down effect on economic fluctuations, which may objectively increase employment opportunities. Economic restructuring is not only a requirement for the sustainable and stable development of the economy, but also can increase employment opportunities. The tertiary industry in the industrial structure often has a large employment capacity, and the investment is small and the effect is quick. Developing the tertiary industry and transferring the population from the primary and secondary industries to the tertiary industry is a way to solve China's employment problems of excessive surplus labor in rural areas and serious invisible unemployment in industrial enterprises. At the same time, China's regional economic structure should also be adjusted to change the policy of overly tilted to economically developed regions, prompting the economic development of backward regions to absorb the labor force.　　3. Comprehensive attention - the current employment policy orientation. China should pay attention to the urban employment problem at the same time also pay attention to the rural employment problem, China's large agricultural population, the implementation of the joint contract responsibility system, the original invisible unemployment manifested itself, a large number of rural surplus labor force influx of urban areas, and more caused by the pressure of urban employment. Attention should not be paid only to the problem of urban employment while ignoring the contradictions of rural employment. For a long time, the approach we have adopted of restricting the rural population's access to urban employment was a countermeasure of last resort, which is impossible to implement in the long term and runs counter to the laws of economic development. The countermeasures for solving China's rural employment problem should now be mainly of two orientations: prompting the rural surplus labor force to develop from cultivation to the direction of large-scale agriculture including agriculture, forestry, animal husbandry and fishery, taking the road of specialized management, and digesting part of the rural labor force on the spot; and developing the small and medium-sized towns and cities, absorbing part of the agricultural surplus labor force.　　4. Developing education - an important means of solving the employment problem. Vigorously develop education to improve the quality of the labor force and reduce structural unemployment. In addition to the universalization of compulsory education and the development of higher education, particular attention should now be paid to strengthening secondary specialized education and employment training for workers. The purpose of strengthening secondary specialized education is to adapt to China's current level of production development and to cultivate skilled and practical personnel. Strengthening employment training is even more urgent, including training for in-service workers, non-engaged workers, and laid-off workers, so as to improve the employment adaptability of the new labor force on the one hand, and to prevent a large number of structural unemployment among existing workers on the other.　　(II) Tax Countermeasures to Solve China's Employment Problems 1. Utilize tax policies to regulate industrial structure and create more employment opportunities. According to the theory of tertiary industry, tertiary industry has a larger capacity of absorbing labor force, and the gradual transfer of labor force from primary industry to tertiary industry is a law. The government can encourage the development of the tertiary industry by adopting measures of preferential taxation for the tertiary industry. Specifically, the government can implement preferential policies such as income tax exemption and reduction of business tax rate for those industries with low investment, fast yield and large employment capacity, mainly commerce, finance, insurance, real estate, warehousing, residential service and catering to speed up their development. Implement special preferential measures of regular income tax exemption for emerging industries related to scientific and technological progress, such as consulting, information, and technical services, to attract labor to move to this area.　　2. Use tax policy to coordinate regional economic development and reduce structural unemployment occurring in regional differences. The structural unemployment put forward in the western unemployment theory actually includes the unemployment caused by different regional factors. China's central and western regions in the capital outflow at the same time, the outflow of talent is also a large number of people, of course, not that each region's labor force must be digested in the region, that is not in line with the law of free flow of labor in the market economy. But from a realistic point of view, the backward areas in the central and western regions in the large number of invisible unemployment at the same time, there is also a lack of senior technical management personnel and the phenomenon of outflow, which is unfavorable to the economic development of the central and western regions, but also restricts the scale of employment of the labor force in the central and western regions in the future. In addition, it must also be seen that the flow of surplus labor in the central and western regions to the developed regions has formed pressure on the employment in the developed regions, such as Guangdong, Hainan and other places, and now has put forward some restrictions on the employment of outsiders. Moreover, most of these transferred laborers are low-quality people who have difficulty in completing high-skill jobs, and if a large number of them are transferred to the east, it will increase the proportion of structural unemployment.　　Tax policies can be adopted: some important industrial sectors and enterprises in the backward areas are given preferential policies of investment credit or accelerated depreciation to improve capital accumulation capacity, expand production and provide more jobs. For the extractive and mining industries, which utilize more natural resources and absorb more labor in the key industries in the central and western regions, preferential treatment will be given to reduce or waive the resource tax and increase the number of value-added tax credits, so as to alleviate their tax burden.　　3. Encourage the development of an export-oriented economy and the export of labor services. Appropriately exporting labor services abroad is also a way to ease the employment pressure in China. Tax policies of income tax and business tax reduction and exemption are given to labor export companies set up in accordance with the law. For labor export in the form of barter trade, which actually exists in some regions, tariffs are reduced or waived on imported goods in exchange for exported labor.　　4. Encourage the surplus labor force in rural areas to develop in the direction of large-scale agriculture other than planting. Provide tax support for forestry, animal husbandry and aquaculture in the countryside, abolish the agricultural and forestry special-products tax, and implement a two-year income-tax exemption policy for professional business combines with promising prospects, so as to encourage them to absorb agricultural labor.　　5. Encourage the development of education and strengthen job training. Appropriately raise the level of the macro tax burden where the economy permits, enhance the government's ability to regulate, and increase the state's investment in education. At the same time, encourage enterprises and individuals to increase their investment in education, allow the amount of expenses used by enterprises for employee training to be deducted from taxable income, and in the personal income tax, add a deduction item for education expenses, which should no longer be a generalized deduction. To the community established by law to provide employment training institutions specializing in giving preferential treatment of income tax reduction.