Study On How Chinese-style Fiscal Decentralization Affect Structure Of Local Government Revenue

With the development of the theory of fiscal decentralization, the research on all aspects of fiscal decentralization has been deepening.The study of this paper is the impact of fiscal decentralization model for the local fiscal revenue structure.We find that the degree of fiscal decentralization has a negatively related impact on local fiscal revenue.With the Fiscal authority has been collected by the central government, Local governments will be more inclined to choose non-tax revenue, the proportion of non-tax revenue in local fiscal revenue has been rising.There are 32 provinces, municipalities and ethnic autonomous regions in China.There are more different of the level of economic development between this regions. We will use the economic development data of 31 provinces and municipalities as an index, we will use this index to divide this regions into three grade by Eviews. The first is the economically developed regions, exclude Beijing Shanghai and Tianjin. There is a negatively correlated between the degree of fiscal decentralization and the proportion of non-tax revenue in fiscal revenue. The second category is backward regions, just like Xizang. The revenue of Xizang mainly come from the Transfer payments that the central government give to local government. So that, the degree of fiscal decentralization had no significant effect on the proportion of non-tax revenue area. The third category is some regions that have a rapidly development in economic. The less financial power was be given to the government of this regions, the more non-tax revenue will be collected by this government. The main reason can be summed up as that the degree of fiscal decentralization stage for a long time at a low level, and local officials have been accustomed to raise revenue by the way of increasing in non-tax revenue. Even a slight increase the degree of decentralization can not raise enough local revenue,so that the local officials is more inclined to increase non-tax revenue. Another explanation is that the increased decentralization efforts make part of revenue transferred from the central to the local. In this case the number of central transfer payments to local governments to reduce tax revenues will be significantly lower than the transfer of. Therefore, the total amount of local level income will decline, if the total amount of non-tax change, then the proportion of total income will rise. Since the economy in most parts of the high-speed development stage, therefore, the degree of fiscal decentralization in the country for local fiscal revenue in Central Africa the proportion of income was negatively related effects, with the central authority on financial income, local government will be more inclined to choose non-tax revenue, the proportion of local fiscal revenue in non-tax revenue will rise. Local governments to increase non-tax revenue too much favor to make the local revenue structure distortion. This will destroy the stability of local government operation. Therefore, we will give some device to the phenomenon of strange fiscal structure.