The Research On The Financial System Reform Of Governing The County Directly By The Province

The system of tax division between central and local governments has been taking for more than ten years, it gathered plenty of financial resources for central government successfully and straightened out the fiscal relationships among them. But the right of property and the position have been divided indefinitely, so the right of property gathered upwards, and the position transferred downwards. The disunity of two rights leads to basal government's fiscal hardness straightway and makes"issues concerning agriculture, countryside, and farms"go worse. These problems can't be solved for many years and go bad increasingly year by year, so all the people pay their attention to the financial system reform. They hope figuring out the problems ultimately through the reform. At present, many provinces has started the system reform of"governing the county directly by the province", many more are waiting for summarizing experiences. Choosing the subject is base on this background.The essential of"governing the county directly by the province"is a question about the best scope of local government, and is also a question about the decentralized and the centralized financial system. Therefore, this paper introduces western Public Goods Theory and Decentralized Public Finance system Theory; demonstrate its rationality from the view of theoretic. Beside, I also exert management science and some rules in constitution to explain the necessity of abolishing the system of"administrating the county by the city".The discussion about this reform begins with the running status of finance and tax system, then, the problems result from it are analysed. This is the third part. At last of this part, the paper depicts external requirement and realistic possibility of the reform. All above is the third part of this paper. The fourth part specifies the content and steps of reform, then gets a result that the system of governing the county directly by the province is worth generalizing on the basis of totally summarising. The last part brings forward some basic principles that adjust measures to local conditions popularize step by step for reform according to different complexion all over the country, then orientate functions of local governments renewedly and advice innovating financial system, taking corresponding reformational measures.