Research On The Effects Of Transfer Payments To The Provincial Tax Revenues

The main source of local fiscal revenue constitutes of tax revenues and transfer payments the central government transferred to local government. The relationship between the them is an important research content of public finance. The central transfer payments to the role of provincial government tax revenues for research will improve the level of local government tax revenue, improve local government performance of the governance ability, improve the level of public services, solve the problem of governance that does not match the current our local government entity, provide theoretical basis to realize equalization of public service. Study the effects of transfer payments of tax revenues to protect the provincial government financial stability, improve the local tax system and transfer payment system in China is of important theoretical and realistic significance.Under the premise of papers in the presence of tax competition, the transfer payment factor is introduced into the tax competition reaction function, based on1997-2012panel data of28provinces in China, using spatial econometric model to study the effect of transfer payment to the provincial government tax revenues. This paper is on the basis of combing related literature at home and abroad with our research. From theoretical side the research started from two paths of tax effort and capital flow to study the effect transfer payment of tax revenue, and from empirical aspects the research uses spatial econometric model to study the effects of total transfer payment to the tax revenue and the influence of the clustering analysis, the transfer payment and tax income different relations and the influence of the transfer payment of tax revenues features area. The last part of paper gives conclusions and policy recommendations. The structure of the thesis is:the first chapter is the introduction part, mainly introduces the problems, put forward the selected topic significance, the research method and structure of the article, the innovation of the article and the insufficiency. The second chapter is literature review part, both at home and abroad on the impact of the transfer payment on provincial tax revenue related literature to comb. The third chapter is the current transfer payment and the provinces in our country tax revenue relations of the theoretical analysis and the analysis of the current situation of the relationship between the two. Using spatial econometric model chapter4analyses the effects of transfer payment to tax revenue at the provincial level in various cities and provinces. Chapter5for clustering analysis according to various provinces and cities will transfer payment and classify the relationship between tax revenue and economic development level, analyzes the influence of the transfer payment of tax revenue in different areas. Chapter6lists the conclusions and policy suggestions of this paper.Methods of data used in this article, on the basis of the following conclusions: first, there is the premise of tax competition, the central government to local government transfer payment has important influence to the provincial tax revenues, but different to the influence degree of different provinces. Second, in response to the tax competition reaction function, analysis of the overall tax revenue of the provincial government and the government of the central transfer payments has significant positive correlation, namely the central transfer payments increase tax revenues will increase in the province, instead of the province’s tax revenues will decrease. Third, in clustering analysis, the paper based on the relationship of transfer payment and tax revenue, considering factors of economic development level,28provinces can be divided into two categories:economic development level of a higher level of tax revenue is higher than the level of transfer payment seven provinces and other21provinces; The other three provinces in eastern and central and western areas. We concluded that economic development level of a higher level of tax revenue is higher than the level of transfer payment in the remaining three seven provinces and eastern provinces, the transfer payment has no effect on tax revenue; Lagging economic development in central and western regions of the province, affected by the level of transfer payments, tax income levels, in turn, affects the region province level of public services.