A Study On Guarantee Of Counties' Fiscal Capacity In Hubei Province

In China's administrative divisions,the county is the core and basic part.As early as the Spring and Autumn Annals,the county system has appeared,and was generally implemented after the Qin Dynasty.County governments have a great significance for the maintenance of local social and economic stability.Since the founding of the People's Republic of China,China has adopted fiscal systems such as "unified revenue collection","fiscal lump sum" and "tax sharing".After the tax-sharing system reform in 1994,the central and local governments redistributed their fiscal capacity and responsibility,and the local governments' fiscal capacity and responsibility could not form a good match,and the county governments were no exception.Financial shortage problems led to the county governments perform management functions inefficiently,which will also have a significant impact on the socio-economic development of the county.Therefore,the study on guarantee of counties' fiscal capacity,implementing the effective guarantee of county governments' fiscal capacity,has a great contribution to the improvement of China's public financial system,but also the basic requirements of building a harmonious society.At present,the main content of the county governments' fiscal capacity mechanism is based on the division of fiscal income and responsibility of county governments,supplementing the implementation of transfer payments,"province governing county",the guarantee mechanism of governments' fiscal capacity and other systems,so as to guarantee the county governments' fiscal capacity comprehensively.In the long run,we should focus on the construction of the county governments' fiscal capacity,to achieve fundamental guarantee.This paper starts from the basic concept of county governments' fiscal capacity,defines its concept,coverage and guarantee situation.Then,it analyzes the current guarantee situation of county governments in Hubei Province.This paper selects 61 counties in Hubei province from 2007 to 2014,analyzes the general situation and structure of income,expenditure,and transfer payment,and finds that the following problems exist in the fiscal capacity guarantee mechanism of county governments in Hubei province.Firstly,the level of counties' self guarantee of fiscal capacity is not high.Secondly,the quality of income is not high.Thirdly,the responsibility of county governments is heavy.Lastly,the transfer payment system is imperfect.In order to determine the important guarantee factors of county governments' own fiscal capacity,this paper continues the empirical analysis and finds that industrial structure,tax decentralization and expenditure decentralization are important factors.Tax decentralization and expenditure decentralization have a significant influence at present,and industrial structure will have a significant influence in the future.Based on the study on the guarantee of the fiscal capacity of the county governments in Hubei Province,this paper puts forward the policy suggestions on guarantee of fiscal capacity of county governments in Hubei Province,by drawing on the experiences of the guarantee mechanism of local governments' fiscal capacity in developed countries such as USA,Germany,Australia and Japan.Firstly,focus on the development of counties' economy.On the one hand,concerning about the overall level of development of the counties' economy,on the other hand,making efforts to optimize the county industrial structure.Secondly,build a local tax system with real estate tax as the main tax,including optimizing the tax set,expanding the scope of taxation,improving the tax basis,determing applicable tax rate;Thirdly,we need to improve the transfer payment system,including the improvement of the general transfer payment system and the special transfer payment system,the establishment of horizontal transfer payment system;Finally,improve the mechanism on guarantee of counties' fiscal capacity,including the rational distribution of county governments' responsibilities,optimizing the county governments' debt management,and improving the regulations of bonus funds in the guarantee mechanism of governments' fiscal capacity.