Research on the Influencing Effect of Income Tax to the Financial Distress Cost of Chinese Listed Companies

Based on the data of Chinese listed companies sampled from 2002 to 2006, the paper did an empirical study on the influencing mechanism of income tax to the financial distress cost, and found that differences in tax rates didn't influence financial distress cost, but preference in tax base and amount could reduce the financial distress cost, and the financial support of government could reduce the financial distress cost and influence the debt and finance decisions of the companies.