Research On The Impact Of Horizontal Tax Competition On Economic Development

The1994reform of the tax system makes more independent economic interestsof local governments in China. Local governments engaged in a fierce competition fortheir own benefit, while horizontal tax competition between local governments hasbecome the primary means of theirs fiscal competition. At present, the research oneconomic development effects of tax competition can be roughly divided into twocategories: On the effective theory of tax competition and the inefficient theory of taxcompetition. Horizontal tax competition is benefit for economic development, but tosome extent also hinder economic development, economic development effects of taxcompetition can not be generalized.In fact, horizontal tax competition between local governments is a process toattract favorable elements flow into own region and ultimately to improve their ownwelfare for the purpose of the competitive. Based on this idea, horizontalintergovernmental carry out tax competition to attract the mobile economic factors ofcapital, labor and consumption, flow into own region and act on the economicdevelopment. Therefore, starting from the capital, labor income and consumerspending elements of the tax competition, study the effects of inter-provincial capitaltax, labor tax and consumption tax competition on economic development.In detail, the first part mainly introduce the writing background and significance.After the relevant literature review, we put forward the ideas and methods of thisthesis; The second part is a general analysis of the domestic tax competition,Including the definition of tax competition, classification and development oftheoretical basis and clearly focus on the subject of this study; The third part is theintroduction of the development process of horizontal tax competition, carding a largenumber of systems within and outside the system in the form of horizontal taxcompetition and case analysis; Fourth part is based on the estimated effective tax rateof the domestic provinces capital, labor and consumption elements, testing based onthe elements of the tax burden tax competition, the results show that theinter-provincial capital tax, labor tax and consumption tax competition exists; Thefifth part combine the theory of general economic effects of tax competition and taxcompetition model, and analysis for the theory of tax competition on economic development; Part VI build a model based on the elements of the tax burden of the taxcompetition indicators and economic development indicators, use of panel data tostudy the impact of horizontal tax competition on economic development; PartVIIconclusions and recommendations.