Tax Shared And Local Fiscal Effort

The distribution relation of tax revenue in system of tax distribution can be summarized as the central and local governments signed a tax distribution contract and a tax share contract,and the tax sharing contract is the main part of China local fiscal revenue lies.When we discuss of local financial imbalance,the main concern is the difference of local economic development,but the lack of fiscal effort is often neglected.The transfer payment as the main institutional to balance local finances,some studies have shown that the transfer payment system of local fiscal effort has a negative incentive.The tax sharing between the central and local governments is the main aspects of the distribution relation,and happened before the transfer payment from the logic,also have a more direct impact on local finance.Theoretical research shows that into positive incentive the effect of tax sharing contract of local fiscal effort is less than tax distribution contract.In the view of traditional principal-agent theory,the local government as "a agent" which behavior is the controlled by political factors.On the other hand,from the perspective of the system of "logic",local government behavior also effected by the non-political factors and itself's autonomy.On the basis of theoretical research,this paper estimates fiscal effort and tax effort of China area.Estimation resultses show that the fiscal effort of different areas with strong geographical agglomeration effect and regional differences are obvious.But the tax effort is showing stability characteristic.According to the estimation results and the theoretical basis,this paper shares the view that the main factors affecting the level of local fiscal effort are the political factors on behalfed of a tax sharing contract,the non-political factors and thelocal autonomy.This paper uses a spatial Durbin model to test and the results show that when the local government tax sharing ratio is high,the enthusiasm of local governments for their efforts in fiscal revenue will increase accordingly.There is a strong negative spillover effect of fiscal revenue strategy activities among local governments on the local ecological function in geographical space.The spatial lag of income sharing shows that the effects of the tax sharing play a role in areas near to the groundFiscal expenditure the level of regression coefficient indicates that the local pressure promoting effect.The regression results of the tax effort show that,the tax sharing ratio has a greater positive effect on tax effort than on fiscal effort.Tax revenue strategy between local governments on local ecological effects of negative spillover effects is obvious in thegeographical space.The fiscal revenue strategy activities among local governments have a strong negative spillover effect on the geographical function of local ecological utility.The fiscal expenditure reveals the spatial lag effects of fiscal expenditure on the spillover effect of the space competition area,which indicates the area between the fiscal expenditure competition to inhibit further tax,it is possible for local government tax competition area to show the strategy according to the substitution effect.Based on the results of theoretical research and empirical analysis,this paper puts forward the following policy recommendations for improving financial efforts in China for reference.First,it clarifies the division of responsibility between the central and local governments.First of all,it is necessary to make "separation" and secondly to clarify expenditure responsibilities at all levels.It is to adjust the proportion of revenue sharing between the central and local governments,with the focus on improving the percentage of tax revenues by local governments.Thirdly,to complete the transition from "share" to "share tax" and gradually perfect the conditions for the implementation of the tax sharing contract,with a relatively thorough tax-sharing alternative.In this regard,we can consider reducing the share of taxes,to determine the ownership of local government taxes;Fourth,improve the local tax system,to find the appropriate main taxes,tax revenue to increase the proportion of local financial revenue;Finally,we must give full play to local autonomy and improve local finance Autonomy,local government gradually from the "agent" to "participant" role change.