The Evolution Of Tax Farming To The Tax Legalization And Its Contemporary Enlightenment

At the beginning of the national state, all organizations and staff can not work without financial support. When the national financial ability is insufficient, tax farming can provide timely financial security for the country. As for the ruler,advantages of tax farming outweigh disadvantages, which makes tax-farming as the rational choice for all rulers. Rights and obligations of both parties from a tax-farming contract have always been in a state of equilibrium: The stronger bargaining power farmers have, the weaker bargaining power rulers have, and vice versa. Even though contract transaction costs is increasing, it is difficult to break the equilibrium as long as there are enough profits or a higher discount rate. The spirit of the tax-contract and the democratic consciousness of taxpayers become the driving forces to change this situation. The rulers obey not only God, but also the law.The evolution of Britain tax-farming to the tax legalization gives us enlightenment. The Early British monarchs in order to get tax from the people,tax-farming is increasingly prevalent. The representative institution which owns the legislation power started from limiting the King’s tax power to gain this power gradually, and began to supervise all financial activities from the government. During the British political struggles, consensus through consultation was a great tradition whose spirit reflected everywhere during the evolution from tax-farming to tax legalization. Since the "Magna Carta" was signed, it has been eight hundred years and the legal concept of taxing by law finally gave birth to a taxation lawful state, which is long but also with profound significance.China also has a long history of tax-farming. Because of the powerful feudal imperial power, the policy of restraining commerce, and the large bureaucratic system taxing, Chinese tax-farming was far less flourish than European countries. Since the founding of People’s Republic of China, the "capitation system" during the planned economy period was a typical form of tax-farming. Especially after the tax-sharingsystem was found, "taxation task" is treated as the key work for tax administrations,which is assigned layer upon layer and connected with political futures of officers,while sets the tax-legalization in a subordinate situation.All of these cause many problems in grass-roots governments. The concept of tax-farming in taxation task is conflicted with the concept of the rule of law, which certainly hinder the process of finance and tax legalization in China.In order to realize the modernization of national governance capacity, we must realize the modernization of tax legality currently. To get rid of straits of the taxation task,we should change the concept of tax-farming in all aspects of finance, establish the concept of the rule of tax law, improve financial and taxation legal system,enhance the standard of public budgets, reform tax administration mechanisms, and adhere to the standard of the rights of taxpayers.This essay is mainly from the following aspects:In the first chapter, sort out the evolution of tax-farming respectively about the Rome Republic, England, France, Russia and China, to recognize the rise and fall of tax-farming and analyze its historical value and shortcomings.In the second chapter, discuss the reason why the tax farming has been existed for a long time based on the predatory ruling theory. From the three factors, relative bargaining power, transaction costs and discount rate, this chapter explains a historical phenomenon that the ruler was in favor of tax-farming no matter whether the state was in a weak financial capacity or in a powerful one.In the third chapter, analyze the legal logic of tax-farming by the contractual theory. Revenue is the debt of the public law and the premise for tax-farming is the tax contract. Studying on the legal nature, pattern type and legal relationship of the contract, we can know rights and obligations of tax-farming parties and its legal logic.In the fourth chapter, discuss that many social reforms promote the tax-farming to the rule of law, even though the tax-farming is of great significance to the finance and politics for Medieval states. To explain this issue, this paper bases on the England tax legalization to analyze the decline of tax-farming through political, economic and social factors. Finally, summarize the experience and revelation of the evolution from tax-farming to tax legalization in England.In the fifth chapter, study the current tax farming form of China, as well as how to transit tax-farming to tax legalization. Since the People’s Republic of China was founded, tax-farming has always been existed and "taxation task" has become abarrier to implement the tax statutory principle. In order to truly achieve the modernization of tax legality, we should propose measures to change the tax-farming concept and repeal the taxation task. This part is based on the tax legalization experience of England from five aspects: the tax consciousness, the tax legal system,the public budget, the tax authority and its obligations as well as the tax legal relationships.