Research Of Transfer Payment Based On Equalization Of Public Service

Before 1994, the financial control system is highly centralized; local government is lack of acting on its own. Although there were some kinds of government subsidy, they were not the transfer payment in a real sense. After the reform of tax-sharing system, government has controlled most of purse strings, while locality has controlled most of power or authority. With the inharmonious purse strings and authority, the level of public service has resulted in the boom of problems. Recently, the government has paid more and more attention on equalization of public service. And fiscal transfer payment is one of the most important ways to resolve equalization of public service between areas. Therefore the study of transfer payment based on equalization of public service has important theoretical and realistic meanings. The article is elaborated into next five parts.In the first part, the article explains the background and significance of transfer payment and equalization, analyzes the present situation at home and abroad, then elaborates its content and methodology.In the second part, this article discusses the relationship between transfer payment and equalization of public service, and their connection with welfare economics, and then points out that to achieve equalization of public service is the most important aim for transfer payment.In the third part, the author analyzes the transfer payment's disadvantages in equalization, which has made a full preparation for countermeasure suggestions in the last part. In China, the guidance of equalization is not clear and definite, the management and approval of special purpose transfer is irregular, method of calculation on tax rebate is unscientific, and the scale of general transfer payment is small, municipality general transfer payment is defective; the transfer payment system is lack of supervision and control.In the fourth part, the author makes a credit metrics to analyze the connection of transfer payment and equalization of public service in different areas. The empirical analysis enunciated that the total transfer payment has good equalization effect, however the effect of different type transfer payment is different, the equalization effect of the general fiscal transfer payment is the most strongest, the equalization of the central government's special purpose transfer payment is lower than the general fiscal transfer, the effect of revenue from tax rebate is the worst. In the last part, the author puts forward several suggestions on improving the transfer payment in China. Firstly, the government must definitude the guidance of equalization to improve social equity and justice; Secondly, the government must definite the standard of special purpose transfer scenically to regulate its application; Thirdly, the government must improve the method of tax rebate to perfect the transfer structure; Fourthly, the government must regulate general transfer payment to equate the public service; Fifthly, the government must consummate municipality general transfer payment to reduce the discrepancy of development; Sixthly, the government must establish regulation or law of transfer as soon as possible and insure the performance of policy.