Research On The Optimization Of Local Tax System In The Perspective Of Distribution About Tax Power

A new fiscal reform has been proposed in The Third Plenary Session of the EleventhCentral Committee. To make the local tax system more perfect is the major task of this reform.How to optimize the local tax system has been a keystone of theoretic research and practicalexploration.Retrospection to prior fiscal reforms since1949, the tax power distribution betweencentral and local governments is always the keystone of those reforms, which directlyinfluences the reform effect. How to distribute the tax power between central and localgovernments has an impact on sound operation of economy, on the function of governmentmacro control, on the initiative of local development and on the change of tax system.Therefore, the optimization the tax power distribution in local tax system is not only a vitaleconomic issue, but also refers to perfect the system in the field of fiscal law and tax law.There are so many system dilemma of the current tax power distribution, such as highlyconcentration on legislative power over taxation in the local tax system, absence of local taxcategories, improper distribution of local routine power and financial power and so forth.Multi system dilemma sparks off the depletion of local government fiancé, consequentlyinfluencing the public service function of local government. For this reason, in order toincrease the finical revenue, local governments strive for central government special transferpayment, depend on the land policy to seek extra-budgetary funds and make use ofgovernment financing to raise loans. These measures taken by the government always arisepower rent-seeking, increasing citizens’ financial burden, even breach of law, which directlythreat the national economic development. According to the conclusion of the research, thebest methods to solve the issues mentioned above are proper distribution of tax power,cultivation of local tax categories, perfection of supporting measures for taxation. That is tosay, to achieve the tax power distribution centered upon the legislative power over taxationbetween central government and local government; To optimize and establish the local taxsystem mainly based on the property tax; To complete the supporting measure for local taxsystem so as to ensure the local tax system operated independently. By means of thesemeasures mentioned above and optimizing the local tax system, it could afford the sufficientand stable financial revenue for the local government.The first part sorts out the changes of the local tax system from the Perspective of therelationships between central and local government, and sums up the experience of theprevious fiscal reforms since1949.Based on that, it could provide reference for optimizing the local tax system. The second part analyzes the current distribution of tax power and taxcategories, makes a deep analysis in institutional dilemma of the local tax system in order todetermine the range of the optimization for the local tax system. The third part, with theguidelines of decentralization, tax legalism, balance and coordination, reallocates tax powerbetween central and local governments to achieve configuration of tax power in the process ofoptimization of the local tax system. The fourth part, combined with the experience of localtax system transition, designs items of taxation and supporting measures aimed at the realinstitutional dilemma to bring out optimization of the local tax system.