The Research Of Lawful Regulation On The Harmful Competition Of Taxation

Tax competition is a measure of the national governments or the local governments that the governments make use of tax policies to attract investment, and it also is a tool of finance policy of the government. Tax competition leads to both positive and negative economic effects. The disputation about tax competition is not cease. OECD,EU and other international institutions also raise the boundary of harmful tax competition. Our country should mark the lowest limitation of harmful tax competition in the finance and tax law system like overseas, which can offer standard of the harmful tax competition.The domestic harmful tax competition disobeys the principle of taxation legalization, destroys the unity of tax code, and breaches the value of tax equity. Taxation belongs to sovereign rights of government. On the background of the economic globalization, maintaining just and orderly competitive environment is the promised duty of every country and region. So international tax competition should maintain a reasoning limitation, and avoid to be worsened.The domestic tax competition has become fiercer and fiercer. There are several main reasons to explain this phenomenon. (a)Tax rules is not perfect; (b) Executing tax law is not strict; (c) Finance constitution is not exist; (d) Legislative power of taxation is not clear; (e) The power of finance and administration does not differentiate in constitution; (f) The law of financial transfer payment is blank; (g) The level of tax legalization is too low; (h) Tax administration of justice is short of supervise system, and so on.Law should be used to control the harmful tax competition, and leading the bad side of harmful tax competition to the good side. At first, finance and tax law must be set into constitution, so as to reflect the spirit of fiscal constitution. At second, the tax law must make clear the judicial power of taxation of each level government. The central government should properly give some legislative power to local government, and it keep the power of examination and approved. Thirdly, try to promulgate law of financial transfer payment soon.