Constitutional Research On The Fiscal Decentralization Between Central And Local Governments Of China

How to distribute the state financial power between the central and local governments is very important in the constitutional structure of a country. It is not only related to how to achieve the best balance between the central authority and local autonomy, and how to stimulate local innovation while ensuring national unity, but also related to the economic development, social well-being, protection of human rights and other important issues.There are two basic opposing ideas in the allocation of the state financial power: one is the doctrine of fiscal centralization, the other is the doctrine of fiscal decentralization. In modern society, there are varying degrees of decentralization in whether a federal state or a unitary state, the absolute centralization of fiscal system has actually ceased to exist. Although the patterns and extents of fiscal decentralization systems vary in different countries due to the specific national conditions, the following basic features are common:normative allocation of powers, the dominance of central finance, the independence of local finance and constitutionalism of fiscal decentralization.The fiscal system has experienced numerous attempts of centralization and decentralization since new China. The tax-sharing reform in 1994 pushed forward the relationship between the central and local governments in the direction of constitutionalism. The reform, which was well-organized and implemented in line with the socialist market economy, has played significant role in reasonablely allocating intergovernmental powers and building normative and stable relationship between the central and local. The tax-sharing reform was a useful exploration in implementing the constitutional principle of "two initiatives". Although the relationship between the central and local governments has undergone tremendous changes after the reform, there was still quite a long distance from constitutional decentralization. Due to the specific historical conditions, the tax-sharing fiscal system lacks theoretical foundation and macroscopic institutional arrangements on the constitutional basis, leading that the fiscal decentralization system is neither clear nor firm. What's more, there are irrationalities in the design and operation of the specific system. The problems above resulted in deletion of public character of the public finances.In a conclusion, we must improve our tax-sharing fiscal system in the perspective of fiscal constitutionalism. Enhance the democratization and institutionalization in the fiscal area, bring the structure and content of fiscal decentralization into the basic framework of the constitutional system. Firstly, it is necessary to transform the functions of governments and distribute governmental functions scientifically; Secondly, allocate intergovernmental financial powers according to the principle of the unification of responsibilities, powers and interests, authorize local governments certain legislative power of tax; Thirdly, standardize fiscal transfer payment system to further rationalize the fiscal relationship between the central and local. The priority is to improve the legal system of tax-sharing system, laying a solid constitutional and legal foundation for the operation of fiscal decentralization system.