Analysis On Subnational Tax Competition In China

There are all kinds of competitions among local governments since each one is an entity. The research on subnational tax competition has become integrity in the western academic circles. But it began from recent years in China. In reality, subnational tax competition has existed in China for long time. With the reform of public finance cent power, local governments own inside motive to participate tax competition. At the same time, market economy creates environment for tax competition. Subnational tax competition is more and more widespread, and the methods of competition are more and more. This paper divides the subnational tax competition in China into three stages to illuminate its development by the history induction.There are a lot of controversies on the theories of subnational tax competition aboard. Some scholars think the tax competition are invalid, some theories argue tax competition is harmful, valid theories of tax competitions are also exist. All of these are the dissimilarity result on the different assumptions. In our country, subnational tax competition also shows it's two-sided, and makes a series effects on the economy development. On the one hand, the local governments drew on a great deal of foreign capital through tax discount, and promote economy development. On the other hand, local governments do lots of abnormal competition methods, so that get some bed sequent. The reason are our legal system environment, public finance cent power, the officials promote mechanism and so on. Since the political system in China belongs to centralization, is different from the federal west nations. The academic achievement in the west nations can't be move completely in our country. It need solve our problem according to our characteristics. Thus, this text investigates the problems of subnational tax competition in China with demonstrative analysis as far as possible, and explains the effects on our economy. Then it fixes evaluation criterions of malignant subnational tax competition in China. Finally, it puts forward some suggestions aiming at the problems of subnational tax competition in our country to improve the mode of competition and promote our economy development. This paper includes five parts: the first part to introduce the definition and classification of tax competition, and analyze causes of Subnational Tax Competition Formation; the second part to summarize research on the theories of subnational tax competition at home and aboard; the third part is demonstrative analysis of subnational tax competition in China. It analyzes the means and degree of influence on our economy by investigating evolvement of subnational tax competition in China; the fourth part to choose evaluation criterions of malignant subnational tax competition in China, according our characteristics and foreign experiences; finally, it forwards some suggestions aiming at the problems of subnational tax competition in China.