Political Connection Effect on Tax Discrimination：“Less Levy ” or “More Refund”
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| Title | Political Connection Effect on Tax Discrimination：“Less Levy ” or “More Refund”
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| Author | Pan Wenqing, Dai Chuan and Xie Jingyu |
| Organization | School of Economics & Management, Tsinghua University；Lingnan College, Sun Yat-Sen University |
| Email | panwq@sem.tsinghua.edu.cn；daich3@mail2.sysu.edu.cn |
| Key Words | Political Connections; tax discrimination; tax burden; FGLS; Tobit |
| Abstract | This paper empirically examines the correlation between political connections of private firms and tax bias based on unbalanced panel data of 628 private firms listed from 2004 to 2009, subdividing the political connections into official, Congress or CPPCC background political connections The result shows that firms having official background political connections obtain both a lower tax burden ratio and a higher tax refund ratio，which indicates that tax discriminatory effect of “Less Levy” and “More Refund” are coexist. However, firms having CPPCC background political connections only obtain a lower tax burden ratio. Additionally, there is no obvious time-lag effect in the process of levy or refund. Specifically, official background political connections affect a firm’s tax burden by turnover tax ratio while CPPCC background political connections affect it by income tax ratio. |
| Serial Number | WP633 |
| Time | 2014-08-05 |
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