Study Of The Fiscal Transfer Payment System Under Province Level

Intergovernmental fiscal transfer payment is the major event among government at all levels. It aims to ensure that people in different places can have fundamentally the same financial treatment, and achieve the equalization of fundamental public service. In 1994, China had the reform of system of tax distribution. With the deepening of reform, the system of intergovernmental fiscal transfer payment has established and improved continually. The scale of it expanded and the effect was increased, which has greatly boosted the development of China’s economy. However, during this period, there are also many problems. For example, it works not so well among the equality of fiscal capacity and fundamental public service.The party’s seventeenth congress report has made it clear that the system, which needs to match the financial capability and administrative power of central and local governments, should be improved. The decision of some important issues about deepen the reform by the Central committee of the Communist Party of China which passed in third plenary session of the eighteenth central committee of the Chinese communist party, also pointed out that China should comprehensively deepen financial and taxation system reform. In the State Council on several issue related to improving the transfer payment system from central government to the local which issued in 2015. It pretend the guiding ideology, major principle and related measure of the reform of financial and taxation system, which aimed at the problems and disadvantages of the system of intergovernmental fiscal transfer system.This paper is written according to the present reform condition. At the same time, considered that it can’t point out the targeted advice if the paper use wide range of data, and also the practical applicability will be influenced, therefore the paper analyses the financial data of Jiangxi Province and then propose tome useful theories of improving fiscal transfer payment system of under province level.In the structure of the paper, first, the paper analyses the character and current situation of the fiscal transfer payment though the general situation of financial revenue and expenditure, and the general situation of supply of fundamental public service. When analyzing the current situation of fiscal transfer payment the paper analyzed through the GDP、GDP per capita、public financial budget revenues、public financial budget outlays and financially self-sustaining. It turns out that in Jiangxi Province, the economy is growing year by year, but the gaps between the rich and the poor among different region are still there, and the good of equalization of financial capability hasn’t come true. When analyzing the situation of supply of fundamental public service, the paper make a comparison between the lower-provincial level investment to education、social insurance、health care and the lower-municipal level. Through the analysis, we can see that Jiangxi actively respond to the call of central government, increase the input to the south of Jiangxi. But in general speaking, there is still lack of investment to the health care.Second, in the demonstration part, the paper analyzed the equalization of finance and fundamental public service through different ways. When analyzing the financial equalization, the paper uses the tool of variable coefficient to measure the unfair effect of lower province level fiscal transfer payment on countries’ distribution. It comes out that fiscal transfer payments contribute to decrease the unfair distribution and to a certain degree, it suppresses the unfair situation of countries’ economy, but it has limited effectiveness. There is still a big gap between different countries’ fiscal expenditure. To demonstrate which has most significant effect on that gap, the paper use OLS regression model. And it turns out that the economy development level is the most significant factor.When analyzing the equalization of fundamental public service. This paper constructs the index system to evaluate the equalization of fundamental public service, and use the extreme processing method on the selected indicators to do dimensionless treatment. At the same time, synthesizing these dimensionless treatment indicators into the index of basic public services, and then synthesizing these indexes into basic public service index of different regions. At the same time, still in accordance with the principle of variation coefficient to construct the equal access to basic public service area index. It can be seen from the result that in Jiangxi, the government has increased the investment to the education year by year and generated the remarkable results. But overall, the level of fundamental public service is still low. And there is still a long way need to go to achieve the equalization of fundamental public service in the whole province.In the end, the paper demonstrates some problems of fiscal transfer payment in Jiangxi Province through the analysis of preceding part of text, such as inadequate fiscal transfer payment, mess of management of special transfer payments, undefined expenditure responsibility, lack of evaluation system and supervision system. Grounded on realities of Jiangxi Province, and the above problems, the paper proposed the concrete configuration of reform. And the purpose not only can be used in Jiangxi Province, but also can be taken example by other province.