Research On Building A Good Horizontal Tax Competition Environment Under Central Angel

After the reform and opening up, as China's growing economic strength, the gap of economic development level across regions is getting large. Local governments, therefore, pay more attention to their own economic indicators and fiscal interests; and the economic competitions among local governments are more and more intense. Began in 1994, the reform of tax distribution made the authority of fiscal policy of local governments clear; meanwhile, the reform provides the conditions and basis for the local government economic competitions. Tax becomes the primary means of economic competition. In this process, preferential tax policies become the first choice for all levels of government primarily. The government vie for and control the taxation resources to attract more investment, increase revenues and stimulate economic growth .From the competition theory, a reasonable standard of inter-governmental tax competition is conducive to promoting the system of government innovation, increasing the operational efficiency, improving the public welfare and raising the taxpayers'benefits. However, the absence of current tax laws and regulations, imperfection of fiscal and taxation system, confusion of the local competitive behavior and many other issues which affect the competition order, bring inter-governmental tax competition a lot of kickbacks. In the current system of inter-governmental tax competition and a series of circumstances, it has been unrealistic to compete with its own norms and co-ordination relying solely on the capacity of local governments. Therefore, we should start from the perspective of the central government to understand, evaluate and regulate our inter-governmental tax competition environment; and to create an orderly, healthy and efficient inter-governmental horizontal tax competition order.At present, the theoretical circles have achieved research results in the tax competition of government, especially in the tax competition definition, classification, theory origin and other aspects. These studies mainly focused on the analysis of the causes and the effects of tax competition. However, the research on building inter-governmental horizontal tax competition environment from the central level is still lacking .Drawing on the theoretical research of domestic and foreign scholars, this paper engages in research starting from the central government level to build a good competitive environment. Full-text is divided into six parts: The first part is introduction. The second part focuses on the elementary theory which the research project based on and provides a theoretical reference for the analysis of tax competition between our governments. The third section describes that the central government plays an important role in the increasingly fierce competition of the local government, and it is urgent and necessary to study the horizontal tax competition in the central perspective. The fourth part states the horizontal tax competition environment in detail from system environment, institutional environment and law enforcement environment. Part V introduces the survey, experiences and lessons of the United States, Switzerland and Brazil on the inter-governmental tax competition as an empirical reference for the analysis of tax competition between our governments. Part VI gives some suggestion to build a good horizontal tax competition environment. This section submits to build a good horizontal tax competitive environment under the central angle from three aspects: relaying on the regional economic development strategy, clarifying the division of the central and local powers and establishing the legislative system of local tax to create a restrict system.