Tax Competition Among Local Government Behavior And Regulation In China

Since the 80s of the 20^th century, local government have the right of autonomy to some extent with central government putting decentralization of power and transfer of profits policy into effect, advancing marketization and decentralization reform in our country, especially establishing system of tax distribution. So the right of control for the revenue expanded and gradually formed individual government economic interest. In order to pursuing maximum interest, local governments in search of social resource continuously, competition layout was formed among local governments, but intergovernmental tax competition is one of the main forms of governments competition. Governments of all levels carry out fierce competition to gain tax resource in order to obtaining interest because of conflict of interest. Moderate tax competition among governments will give positive effect to our society. On the contrary, unfair tax competition will bring financial problems to our governments, affect the development of regional economies and even influence national economic stability produce negative effect.Meanwhile, because long history, politics, policy reasons result in the development of regional economies imbalance, combined with fiscal law has some legal loophole, tax revenue system is imperfect and tax law enforcement is unregulated, government directed toward some poor region make a series of preferential policy to achieve balancing of interest. For developing regional economies, some local governments keep tax cuts to scramble for liquidity factor. But take economic growth as political achievements standard has already intensified the competition among local governments. It arouses many discussions about unfair tax competition in theory horizon. Because tax bearing is distorted, resource allocation efficiency is reduced and the development of regional economies gap is widened.Unfair tax competition among governments, including tax reduction or unauthorized preferential tax rates, tax rebates or tax incentives, unfair tax package, lead into sale of tax, revenue forced recruitment and other unfair acts. This act of unfair tax competition not only violates the legal principle of taxation, undermining the unity of the tax law. But also against the idea of the value of tax fairness, even more resulted in the loss of the overall tax benefit. Our country ought to use legal means to regulate the intergovernmental unfair tax competition, fundamentally control tax competition, and guide them toward positive. Firstly, determine the control of the intergovernmental tax competition principles, the district to distinguish between legitimate tax competition and unfair tax competition standards. Secondly, clearly realize the intergovernmental tax competition lawful behavior characteristic, encourage the legitimate tax competition. Thirdly, confirm the type of the behavior of the intergovernmental illegal tax competition, and the constitutional elements of the act of the unfair tax competition. Finally, improve the behavior programmed control mechanism of the intergovernmental tax competition in order to legal form standardize the process of tax competition. So how to understand, evaluate and regulate the conduct of intergovernmental tax competition become an important issue of the competition...