The Research Of Horizontal Tax Competition Among Local Governments In China

Since reform and opening up, with the gradual progress of the separation of powers, inparticular the establishment of the tax-divided system, local governments have some autonomousright of financial expenditure and income. In order to pursue their own maximizing benefits, thelocal governments gradually formed the pattern of competition and the conflict of local benefitshas been evident. As a main form of competition among local governments, tax competition hasgone from a gradual development to the process of deterioration. And it has had an impact to thecountry's economy in various fields.This paper seeks to use the general theory of tax competition among local governments,coupled with the empirical research of tax competition among the local governments in China,and to get a comprehensive analysis of the causes, nature and effects of tax competition amonglocal governments. Learning from advanced experience of foreign country to standardize taxcompetition among local governments, I make the policy recommendations—following thepath of harmony tax.This paper is divided into four chapters. The first chapter is the introduction, focusing ontopics background, the scope of the study, literature reviewing and so forth. ChapterⅡis theintroduction of the tax competition among local governments, defining the concept andpresenting the related basic theory. ChapterⅢis the empirical analysis, including the analysis ofthe status, causes and the problem. ChapterⅣsets out the relevant policy recommendations.