Research On Our Choice Of Main Local Tax And Optimization

Since the reform of tax-distribution in our country in 1994, the central government gets more and more fiscal revenue while the local governments undertake more and more expenditure responsibilities. This causes that the revenue of the local governments can not meets the expenditure, especially the county government, and then the local government solutes this problem by the methods such as selling the land, issuing government bonds and so on. In order to improve local governments'revenue and reduce the risk of local governments'debt, we must establish the main tax for the local governments urgently. Because property tax has the basic features of main tax of the local government such as abundant tax sources, ease of levy and administration, we should select property tax as main tax of the local government. I get the conclusion that we should select property tax as main tax of the local government by referring to foreign experience and the conditions in china, but at this stage we also need to select other taxes, for instance business tax, as a transition. Finally, this paper discusses how to optimize the design of property tax, so that the property tax can be main tax of the local government really.