A Study On The Internal Horizontal Tax Competition

Since Zodrow and Mieszkowski, most of people have fixed attentions on the tax competition among the independent countries. But in many situations, the tax competition happens in internal governments. Compared with tax competition among the independent countries, the internal competition at least has two different respects: first, without the barriers of politics, laws and with the stronger capital flowability, tax competition is easier to be paid close attention to; second, the same federal tax——transfer policy connects every state together, so that every state's enthusiasm for participating in tax competition is quite different.From above and based on the research from theory to practice, this thesis's structure and content are arranged as follows:Chapter one: the introduction. Combined with China's special national conditions, this chapter explains the research background and meaning of the thesis, and defines the research range.Chapter two: defines the concept of the tax competition, explains three major theoretical foundations of it, summarizes the domestic and international scholar research, and shows the connection among the tax competition, government decision and government efficiency.Chapter three: makes a concrete analysis of China current situation of the tax competition and main means used by local governments. Then, regarding 1994 tax assignment system reform as a watershed, different characteristics of inter-governmental tax competition are distinguished.Chapter four: compiles 30 provinces'(district) data about per capita GDP, foreign direct investment, foreign corporate income tax and basic construction expenditure from 1992 to 2003. Based above, pattern analysis is carried out on the data of Fujian, Guangdong and Shanghai. Then, we can draw a conclusion that local economy development must be based on the promotion of local comprehensive competition capability.Chapter five: based on the above analysis, author gives the reasons of our country's unordered tax competition, including system, idea and environment and so on; then, puts forward the corresponding policy recommendations.