| The legal meaning of the "Local Finance" is the result of the implementation of the system of tax distribution. Tax-sharing system divides budgetary receipts of governments at all levels according to tax revenue based upon dividing scientifically the power of affairs of governments at all levels. In this institution, budgets at all levels which have responsibilities of clear balance are relatively independent. The difference between different levels and regions is regulated by the transfer payment.Public finance is that the government centralizes the social resources for providing public goods and services, meeting public needs. According to the theory of public finance, the scope of public goods is hierarchical, and different levels of public goods from the corresponding levels of government will be more efficient. In order to guarantee the government to provide public products and services, we must give the corresponding property rights. In this case, tax-sharing system has become a system guarante for public finance system.In the circumstance of centralized system, local government have no property rights, and there is no real sense of the concept of "Local Finance".After the mid-time of 19th century, local governors grew gradual in the process of suppression of the Taiping movement and broke center control. The seed of "Local Finance" subsequently appeared.The imagination and attempt of tax-sharing system also appeared in this period. But it was more in name than in reality because of the centralization weakening and armed independent regime of regional warlords in the early years of the Republic of China. Until Nanking National Government established, tax-sharing system were only now being put in place.However, tax-sharing System was designed to concentrate power rather than to establish public finance.The central government had been reluctant to share financial rights with local governments.This tax-sharing system had defects on system design.It only simply specified "Central Finance"and "Local Finance", and there is no definite partition of fiscal relationship between the finance of province and the finance of county. In this case, the provincial government depended on the political dominance to master the local financial authority. In contrast, although county government were responsible to complex administrative, there is no steady source of income.So county government only depended on the extra taxes to maintain utility costs. Difficulties of local government on finance were caused by irrational division of financial authority and powers of financial. It led to mounting exorbitant taxes and raise extra taxes.Anhui Province located at middle and lower reaches of the Yangtze River, and it is in close to capital Nanjing. Anhui Province was basically in the effective jurisdiction of the central government before the Anti-Japanese War. Under such a tax-sharing system, land tax had become the dominant source of income for Anhui Province. This revenue accounted for about 30% of Anhui's local fiscal revenue. After coming into 1930's, likin system suffered from criticism had been abolished. Taxes paid by brokers and slaughter tax had also been reorganized. The industrial and commercial tax system had been gradually established with the business tax as the main element, and grow into the second largest source of income, after the land tax. Debts revenue, non tax revenue and central transfer payment all played roles. Meanwhile, the budget system, treasury system and accounting system of local government had been established. The progress of financial administration had effectively supported the modernization of public finance.However, the institutional improvement of finance can not cover up the problems in the real implementation:With respect to fiscal revenue, the disguised likin system had resurfaced, and additional tax and heavy taxation were more and more serious. Particularly the constant repetition of " Huang Zongxi's Law " had brought the serious disaster to the people. In the process of collection, many officials and publicans mired in corruption and racketeering, and local tyrants and evil gentry did wrongful acts. Their behaviour had aggravated the difficult economic situation and polarization between rich and poor in the rural areas. It also broke system of value identity in village community. These cases foreshadowed the development of land reform in the 1950's.In terms of financial expenditure, the scale of administrative costs was huge, and the investment of government in public affairs was a serious problem. During this era, the central government invested a huge amount of money in military spending to quell opponents. Provinces cooperated with the central government in the way of administration, judiciary. police, education and road construction. In such case, financial expenditure not only did not make significant progress in the social and public services, but suppressed the public demands and strengthened the autocratic rule.During the period of Nationalist Government of Nanjing, local finance of Anhui Province made progress in the way of corresponding system such as financial administration, the scale of income and expenditure and investment of education and economic construction. However, local finance of Anhui Province was extremely alike with the situation of during Beiyang Government in view of the overall situation. Not only were the long-term financial difficulties, but also the financial losses and the people's burden were serious. The local finance had very strong sense of non-publicity.As stated earlier, finance is a good barometer for politics. Essentially, the financial problems of China during this period were mainly due to political issue. Nationalist Government of Nanjing largely continued this kind of policy which had great power but weak responsibility like ancient government. In the case of inequalities between the power and responsibility, not only was the public finance not developed, but also the whole society was not satisfied without welfare or freedom. Accordingly, In the process of building public finance, the necessary development of politics is needed. Only integration of power and responsibility of politics and justice and equity humanities can provide the guarantee for the construction of public finance and let the economic development of the real benefit of the people. |
PDF Full Text Request