Constitutional Thoughts On The Public Financial System Of China

"Regarding the great changes in the societies, such.as drastic changes caused by the formulation and adoption of the Constitution, the power of the economy can be considered as the original or fundamental factor, which gives better explanation of the facts than other factors." The fundamental drive of the constitution is the conflict and compromises of various forces in the society. The causes of these conflicts are mainly economic-related, while the compromises could be reached due to the balance of the interests of relevant parties. In the course of history about the constitutional system established in western countries, public finance had been playing a crucial role as an important bearer of economic interests. As to the constitutions of many countries in the world, financial relationship between the state and the citizens is also one of the elements at fundamental status. All these phenomena are clearly revealing the close relationship between the constitution and public finance."Declaration of Human Rights" states that "There is no constitution in a society in which rights are without protection and powers are not separated", constitutionalism is a real democratic political system based on the protection of human rights and constraint of powers, reflecting the spirit of the rule of law, and full implementation in the state’s real life. It’s easy to make a Constitution, but it is difficult to apply constitutional governance. In China, they are very questions that no one among us could avoid considering how to achieve constitutionalism in China-"What is constitutionalism?" "Why constitutional governance should be implemented?" and "How to implement constitutionalism?" In recent years, the focus of reform is gradually shifting from the Economic issues to political issues, especially to constitutional governance. If the constitutional reform succeeds, not only the success of the results of economic reforms would be guaranteed, the space of economic reform will also be broadened. Nevertheless, the constitutional reform in China is not easy, and it should also take a similar step-by-step and progressive progress as the economic reform. As a very demonstration as well as practical application of the public power of the state, public finance has become a fundamental part for the forging of constitutional governance. Therefore, the public financial system is included in the constitutional issues with contemporary context. For a long time, theorists have been focusing more on the analysis of the defects of market mechanism to reveal the justification and necessity of public finance. But they neglected the way to research public finance, especially the public financial power application under public financial system by researching the fundamental elements to form the constitutionalism including the democracy, the rule of law, separation of powers, human rights. Rational decentralization of power is not only a prerequisite and foundation for the healthy function of the power of the state, but also a guarantee of a rational implementation of the power of the state. This dissertation focuses on the constitutional consideration of public financial system of our country, bases on the traditional field of economic researches of the financial system, supports the opinion that the constitution and constitutional governance should give sufficient attention to public financial system, and establishes finance-financial system-financial powers-constitutional analysis as the main frame of the research.The major corresponding factor between public financial system and constitutional governance is their constraints of power resulting to the protection of citizens’rights. Therefore, I take the public financial power within the public financial system as a breakthrough for elaboration, refer to the theory of the constitutional principle of power separation and constraint, categorize the powers of the public financial system horizontally and vertically, analyze thoroughly the right of taxation controlled by justice, the budget authority with democratic security, the correction of public financial transfer by the rule of laws, and finally conclude the real significance of guaranteeing human rights of the public financial system. Full-text of the dissertation is divided into seven parts of exposition as follows:ChapterⅠ:Introduction. Traditional subjects of economics as well as finance have in-depth views on public finance and a relatively mature theoretical system, that the public financial system is a market-based finance system, dealing with the defects of market, and built to maintain market economy. As the innovation of theories goes on, the constitution and constitutional governance must face the social changes, and take public finance into consideration, and public finance operating mechanism should be incorporated into the constitutional framework. During the process of market development and rule of law improvement in China, the phenomenon that the scholars of finance having insufficient knowledge of rule of law and the scholars of law having insufficient knowledge of finance hinders the issues of public financial system from being explored from point of views of democracy and rule of law. Therefore, it is necessary to analyze the public financial system in a constitutional science and constitutionalism vision.ChapterⅡ:The multi-decomposition of the public financial system. As a basis of the financial systems, finance starts from the general content of the concept, and the financial activities are of several models-household finance, royal finance, the state finance and public finance. There are disparities between the content of China’s public financial system and the concept of the financial system in western countries, especially in the origin of public finance which are research in different logical way. As a major action carried out by China and other modern countries, public financial system features being public, which means it counts on meeting public demands, runs without profiting, operates in accordance with certain standards and in line with the normative and the rule of law and so forth. The critical point of the public financial system-the power of public finance is a key factor. This dissertation analyzes the operation of the public financial system by probing into public financial power. In accordance with the most popular way of power separation of constitutionalism, the public financial power frames horizontally and vertically. In the following statement, the operation of the public financial system is detailed referring to the separation and constraint of powers horizontally and vertically.ChapterⅢ:The relationship between public financial system and constitutional governance. In the process of establishment of constitutional government, the basic pursuit of modern state is:the logical starting point is that constitution takes a supreme status, the ultimate goal is the protection of human rights, and the elementary measure is regulation of powers. The separation of public financial power is precisely a positive response for the basic idea of constitutionalism. Development process from the free country ruled to law to social rule of law, as well as countries from the owner of the right to a tax state or financial country, shows that the transformation of the state is influenced by factors of the public financial system. In terms of the establishment of constitutionalism in modern Western countries, the public financial system (taxation) played a very crucial role. The contests for interests yielded by public finance and taxation, not only directly spawned the Constitution in modern concept, but also laid the basis of the elementary ideas of the constitutionalism-the idea of sovereignty held by the people, the spirit of participation in consultation, the principle of representative institutions and parliamentary supremacy and so on. Under the guidance of the advanced system, the public financial system of China needs to follow the requirements by the constitutionalism:the justice of the public financial system, the specification of the principle of justice within the public financial spectrum; the democratization of the public financial system, focusing on the public opinion base for the public finance; The rule of law in the public financial system, the public financial behaviors acting subject to norms and requirements of laws.ChapterⅣ:In the public financial system of China, separation of powers and rights:the control over taxation under justice. As a basic human right, property right, in the concept of constitutionalism, set up the boundaries and scope of public power. The state can not arbitrarily interfere or invade the right. Contrarily it bears the responsibility to protect the right. As a public power of a state, the public financial power is generated on the basis of violation of citizen property right, and has a legitimate cover. The right and the power are both antagonistic and unified relationship. But taxation as a branch of public financial power, for the first time, makes a clear distinction in the fields of citizens and the state. One purpose of the reform of the public financial system is to control the taxation power. Both the principal that taxation is determined by law as a superficial factor and the equality of taxation as a substantial factor are position as factors of justice of taxation. Thereafter, taxation, as a means of reallocation and adjustment for social resources, values in constitutionalism and help to achieve social justice. By reading the articles of the U.S. Constitution, as well as tax-related articles of Chinese Constitution, we can find that the important principle that taxation is determined by laws does not get proper representation in our Constitution, which has left room for is unregulated taxation law legislation. Therefore, the legislative power for taxation laws must be endowed with "the people’s congress" solely, and "the minimum standard" as due process of taxation law legislation must be set up.ChapterⅤ:Horizontal separation of powers in the public financial system:the budget is guaranteed by democracy. The theory of power separation divides functions among legislative, executive and judicial powers, and makes them achieve dynamic balance in the operation with mutual restraint. Viewing the horizontal distribution of power, the public financial powers should be divided into power of public financial legislation held by parliaments, power of public financial administration held by governments, power of public financial judicial held by courts, and it is in the spirit of "separation of powers and restraint for balances" in the constitutionalism. Modern separation of powers model in constitutionalism is built on the basis of representative institutions, and citizens carry out political affairs decision-making through their elected representatives. From this sense, the constitutionalism model of separation of powers is the constitutionalism model of representative system. In a market economy, public finance is a modern financial system based on modern budgeting, and budgeting is also public finance, in view of mechanism. Budgeting power determines the size and direction of public financial resources, with its core value of financial democracy. In accordance with the principle of horizontal power separation, budgeting power can also be categorized into power of parliamentary budget and power of government budget. Especially when the budget is undergoing decision-making, contests rise between parliamentary budget approval power and government budgeting right.ChapterⅥ:The vertical separation of powers in the public financial system of China:the rule of law corrects the transfer of payments. The theory of separation of powers is of great theoretical and practical value in the classic horizontal power separation. And it is equally important for the vertical power separation, in which powers mutually constraint and dynamically balance between central and local government. We must clearly understand that "federalism" does not refer to any specific model of the vertical separation power, but merely refers to a reasonable distribution of power between central and local government. In a public financial system, the vertical power separation between central and local governments is reflected as the vertical public financial power separation. It has a particular significance for local governments, having it manage to make more efficient use of financial resources to meet the requirement of public service, and it of course, also puts forward higher requirements for the division of the functions of the government. The transfer of payments serves as a useful practice of the vertical power separation between central and local government, which is based on equalization of public services to achieve basic objectives on equilibrium of finance horizontally, vertically and avoiding the external nature. Therefore, transfer payment system must be reformed basing on the constitutionalism standards, and to ensure the vertical power objectives of transfer of payments carrying on smoothly between the central and local.ChapterⅦ:Conclusion:the expectation of human rights in our country laid on the public financial system. In the historical process of promoting the constitutionalism, the establishment and improvement of the public financial system will undoubtedly contribute to the achievement of constitutionalism. Of course, the ultimate goal of both public finance and constitutionalism are almost the same-to protect human rights. The public financial system was born for the citizens (taxpayers). The state and citizens do not share an ordinary relationship of "exchange". Sufficient care and respect must be offered from the public financial system to citizens during the transaction, and everything taken from the people shall be utilized by the people. Therefore, protection of human rights is an ultimate goal for the establishment and operation of the public financial system. Whether the right of freedom, the living right and the development right are fully guaranteed is the benchmark judging the public financial system is well functioning or not. More profoundly, the efficient operation of the public financial system relates to the future development of the country, and is critical to the country’s economic system. If it can’t match the market economy system which is being established, the financial power of the country would be weaken. From the national and personal point of views, the public financial system holds great importance for the guarantee of human rights.