The Study On Improving The Fiscal System Between The Central And Local Government

Fiscal is the basis and significant pillar of governance. The scientific fiscal system plays a main role in addition to, optimizing resources allocation, promoting the unity of the markets, and implementing national security. Our country established unified collection state, the supply system, and fiscal system, in adapting to socialism of Chinese characteristics. These all played historical roles at that stage. The current tax system has been running more than 20 years, which not adapting to the current economic and social development. The third plenary session of 18 opened a comprehensive deepen changing to our country governance system, and ability. How to improving the fiscal system within the frame has become a heated issue.In theory, the fiscal system has complicate contents, nothing more than three key elements:the government power, financial power and financial resources. The government power, financial power and financial resources plays the role of the base, methods and security. The reasonable division between three elements and the combination mode in line with the national conditions directly impact the financial system’s efficiency and the basic public service equalization. The financial system problems are concentrated in the above three elements, and the prescription also should be grasped from the three aspects. On explaining many theories about the fiscal system in the second chapter, the third chapter expounds the concept of the government power, financial power and financial resources and the relationship between them and the important standards whether the financial system scientific and perfect-basic public services equalization.From the practical view, the fiscal system is the important content of economic relations between central and local governments. The reasonable financial system should make all provinces within the jurisdiction perform fair duties and have the enough financial power and financial resources to realize the basic public services equalization across the country on the basis of guaranteeing the country unified. To some extent, each province within the jurisdiction is a judge of the financial system. When each system between the central committee and province is relatively perfect, the reasonable financial system is established.Based on the above theoretical and practical point, this paper selects Heilongjiang province as a single individual to analysis the fiscal system deeply. The forth chapter combs the evolution and influence of the financial system in "the unified income and payment system", "the independent supply system" and "the sharing system" three stages since 1949. The fourth chapter points out the current financial system problems of the government power, financial power and financial resources. About the government power, according to ((the classification of government spending in 2013》,the paper lists nearly 600 spending subject division status quo of the central and local governments in Heilongjiang province, and comes to the conclusion that the central put powers down too much. Combined with the central rigid spending wants much, the governance objectives cannot effectively unified and the policy does not comply with the local reality, the location has the heavy burden. About the financial power, the tax right and tax division is focused on the central. Due to the unreasonable system, the Heilongjiang province tax transfers outside the jurisdiction, especially the VAT instead of the business tax further reduces the province’s tax. The non-tax income and government fund produced by the fee power lacks the institutional constraints and sustainability. The non-tax income accounts for the high proportion of the fiscal income in Heilongjiang province, unable to form the available financial resources stably. About the financial resources, the non-optimal financial transfer payment structure, the lower general transfer payment and too much quantity and related demand of the special transfer payment, directly cause the Heilongjiang province have inadequate disposable financial resources. The problems of the government power, financial power and financial resources eventually lead to the non-coordination between the government power and the financial resources in Heilongjiang province. As result,, this paper through factor analysis method illustrates the problem that compulsory education, social security, public health, ecological environmental protection and public culture and the overall level of public services equalization in Heilongjiang province has a certain gap with other provinces. And the Heilongjiang province raised high loan to need the society’s demond for the basic public service.China is a large country, which has 31 provinces and more than 1.3 billion people. Each province has the different history, climate, resources, population and economic development. Scientific financial system must put all above factors into account. In the process of policy formulation and implementation, how to combine the actual situation of specific provinces, deserves further research. As the research sample the Heilongjiang province has a strong typicality and demonstration:location in the northeast China, a frontier province, the ecological province, great energy, major grain-producing provinces, old industrial province with ice and snow, supplies half crude oil, ten percent coal, and 1/7 commodity grain. The sixth chapter analyses the above special factors how to affect the Heilongjiang province.The problems of the government power, financial power and financial resources are common in other provinces across the country. The seventh chapter puts forward the corresponding policy recommendations on base of the overall discipline according to the three aspects of the problem. About the government power, the paper analyses the existing 246 laws and gives the definition and classification of all current government power, puts forward the goal of the governance legal, laid a solid legal foundation for the government power. Secondly, the paper divides the government power into the central governance, local governance, shared governance and target governance. The government power can reach six standards: guaranteed, floating, increasing, easy to perform, supervised, and safeguard. The fifth chapter shows nearly 600 current expenditures division between the central and the local, according to 《the classification of government spending in 2013》 and gives the proposal that the government revenue should belong to the central, local powers or shared responsibilities, and the proposed share proportion of shared powers. Finally, the central should take in some fields of the government power as soon as possible such as the free flow of market elements, social justice and public security local government unreasonable investment, etc. In terms of financial power, the paper gives some proposes from three angles of the tax right and non-tax. The paper first puts forward the overall tax reform advice including value added tax, consumption tax, resources tax, property tax, environmental taxes, based on this, supplemented by legislation, administration and other aspects of supporting measures. Secondly on the basis of categorizing non-tax revenue, the paper give propose to cancel the unreasonable fees and to keep fees levied in accordance with the law. In terms of financial resources, this article puts forward the general principles of transfer payment, namely, pay attention to the fairness and efficiency, the longitudinal and transverse mode and use, distribution, and the use process,in enlarging the scale of general transfer payments and standardize the establishment of special transfer payments and distribution, and establish the horizontal transfer payment.The eighth chapter gives the specific suggestions according the special character of Heilongjiang Province. Factors on the frontier, as a result of the non-clear forces governance division, the paper propose the funds safeguard mode by the central government; sharing mode involved in common security powers between national and local; to ensure the safety of local economic development and the governance should be local. In view of the ecological factors, due to the performance of the duties and ecological protection, slow economic development, financial allowance, backward infrastructure, put forward to increase transfer payments support, improve the protection engineering allowances, perfect the system of the forestry ecological efficiency compensation fund. For energy factor, most oil revenues to the central, low coal resource tax, income influenced by price changes, exhausted resources, unsustainable income, propose to reserve resource sustainable development, support and business transformation of resources city. For food factor, because of the low income from the food industry and local government spending, and commodity grain price transfer out local government finances, put forward the reasonable major grain producing areas and selling district interests relations, increase investment in agricultural infrastructure and agricultural technology, support, food processing and the development of green food industry. Factors for the old industrial base, as a result of reform legacy of unreasonable industrial structure, the high cost of personnel placement, infrastructure in dire need of reform, big workers’ basic pension gap problems, all need government financial support, propose to offered support to solve the infrastructure transformation and industrial structure adjustment, reduce the burden of endowment insurance. For cold factors, higher construction and maintenance cost, heat high supply cost, the residents’ health spending and high cost of introducing talents, put forward to increase subsidies for cold area residents, especially vulnerable groups of the lowest life to ensure projects, and establish special subsidies for heating.