Study Of County And Township Fiscal Turnaround In China

Since China's implementation of reform of the tax system in 1994, China's financial strength has been continuously increasing, in particular, the fiscal revenue has increased drastically in recent years, the relationship between governments has become more normative. It provides a strong guarantee for enhancing government's capacity to provide public goods and establishing the public financial system. In this process, the problem of the central government's low incomes ratio was solved. Meanwhile , the government's primary finance—township finance was difficult. According to the incomplete statistics, about 70% of China's middle and western regions are encountering financial difficulties. Universalization of wage, the size of the deficit continues to expand, the actual increase in the debt burden, have become an obstacle to establishing the public financial system, to a certain extent, affected the social stability and economic development.Fiscal difficulties of county and township fiscal system were caused by the existing imperfect system, but from a deeper perspective, the reason is that the financial system is the fiscal self-interest. Therefore, in order to solve the financial difficulties in counties and towns, we have to standardize the behavior of the government, act the fiscal constitutional. In this paper we analyze the causes of the current financial difficulties of county and township, give the corresponding measures and suggestions. This paper is divided into five parts:The main briefing papers introduce the main perspective.Chapter one describes the current situation and the necessity of reform of county and township financial system. According to statistics, as well as academic studies have shown that at present, many parts of the county and township finances have been reduced to "eat finance" or even "financial begging for food", and bear an alarming number of liabilities. And the county and township finances as our primary financial commitment with the provision of public goods and services to the rural grass-roots political power and to ensure normal operational functions, the current situation must be changed. Chapter 2 analyzes the difficult situation of China's township financial institutional reasons. In this paper, we think the difficult is due to incomplete of the financial decentralization and reform of the tax system. The responsibility of the county and township financial is over to the financial powers, the government has not regulated the financial relationship.Chapter 3 demonstrates the reason of the imperfect system. The government does not regulate the financial action, because the government is also "economic man", the fiscal self-interest acts is the concrete expression of "economic man": in the relationship between the governments, the government would make the decision which benefit itself and damage lower levels of governments; in the relationship between government and society, government provide the public goods not in accordance with the wishes of the people.Chapter 4 analyzes the strategies to solve the current financial difficulties in counties and towns. Speaking from the system we need a rational division of financial powers and responsibility, and standard system of transfer payments. It stresses the need for a deeper level of democracy financial system, put finance into the constitution. In practice, China has been carrying out the "three awards and compensation," "province direct controlling the county" and " county managing rural finance " and so on, in this paper, these are explored.The paper not only finds the causes of financial difficulties from the system, but also looks at the deeper level mining. To solve the problem in the system, a fundamental solution to the system, that is constitutional; To solve the problem of the financial relationship between the government, the relationship between the government must resolve to restrain the government's economic behavior. On the current implementation of the "three awards and compensation," "direct control of the county," and other measures, this paper analyzes the reasonable and limited, have a more realistic sense.