Study Of Influence On Differences In Regional Economic Development Of China Caused By The Difference Of Tax Distribution

Reform of the tax system in 1994 opened the tax division and distribution between the China’s central government and local government. Since the reform of the tax system, the problem of tax transfer caused by unreasonable regional tax distribution system of our country exists in a large amount, further exacerbating the imbalance in regional distribution of tax. Imbalance of tax distribution is an important reason to increase the regional economic development gap. So, how many ways to come into being the China’s tax revenue distribution? What’s the exact impact of the regional economic development caused by the tax distribution in China? How should we improve the regional tax revenue distribution system and thus narrow the development gap between regions? It has important meaning to study these problems to our country tax system and tax structure adjustment.This paper will start with comparison research of Chinese economic development in the East, Middle, West to explore the relationship between tax distribution and regional economic development. Then shed much light on the China’s regional economic development gap caused by the imbalance of tax distribution. Also, put forward the more perfect revenue distribution mechanism under the tax sharing system in the next step of regional economic development and the way to solve the problems such as the widening gap between China’s regional economic development.The paper firstly reviewed the relevant literatures on the tax distribution of domestic and international theory. Based on this, the paper analyzed China’s specific performance of tax distribution; Secondly, based on the relevant data of China’s three major regional tax distribution and economic development in recent years, the relationship between tax distribution imbalance and regional economic development gap were measured. Form this, the paper analyzed the impact of tax distribution on the difference of regional economic development in the East, Middle, West of China; And using the econometric model(VAR model), tested and verified the influence of tax distribution generated for each of the regional economy. Thirdly, through the analysis of a series of harm to the development of regional economy caused by the imbalance in the distribution of tax, including regional tax income gap, regional economic development gap, regional unfair tax burden, the irrational expansion of the regional government investment, jurisdiction and tax competition of the regional government and so on. The paper put forward some policy suggestions to optimize tax allocation and to improve the management system of tax.