The Effect Of Tax Competition And Economic Growth Of Western Regions In China

With the development of economic globalization and regional economic integration,the forms of tax competition,the means of competition and the competition mechanism are becoming more and more complex,and the impact of tax competition on regional economic development is becoming more and more intense,and it has become a national policy maker and Hot issues explored by tax researchers.With the reform of China's taxation system,the central and local taxation relations under the planned economic conditions began to collapse.The local governments thus formed must obtain certain tax rights,and generally compete for scarce people's property resources through tax competition.Therefore,when formulating the tax policy of the region,the local government is often based on the goal of maximizing the benefits of economic development in the region and forming a non-cooperative game of tax competition with other regions.However,due to the utility of tax competition,tax competition will improve the quality of products and services within the region,promote regional economic development and tax competition,which will lead to excessive preferential tax policies of regional governments,resulting in an imbalance in the internal industrial structure of the region,thereby reducing the products within the region.There are contradictions and conflicts between service quality and internal resource allocation efficiency.Therefore,analyzing the relationship between tax competition and regional economic development,and studying the benefits of tax competition in regional economic growth have important theoretical and practical significance for coordinating the contradictions and conflicts between the two.This study uses 10 provinces and cities in the west as an example to study the effects of tax competition and economic growth in the western region(including Chongqing,Sichuan,Guizhou,Yunnan,Tibet,Shaanxi,Gansu,Qinghai,Ningxia,Xinjiang),using the 2010-2016 panel.Data,using qualitative analysis and quantitative analysis combined with empirical research methods,to study and demonstrate the role and effect of local government tax competition on economic growth.The research includes the following aspects: First,it reviews the theoretical results of tax competition,including the theory of government competition and the theory of tax competition.Secondly,it analyzes the theoretical mechanism of the impact of local government tax competition on economic growth,and believes that local government tax competition behavior will directly lead to changes in the cost of production factors,which in turn affects the allocation and decision-making of production factors,that is,within the region.Tax competition will change the market return rate of scarce resources such as capital,labor,technology,etc.,thus affecting the allocation and decision-making of production factors,and ultimately affecting economic growth within the region.Thirdly,through the Moran index,the existence of tax competition of local governments in western provinces and cities was verified,and then the production function was used to analyze the effect of local government tax competition on economic growth.From the trend of 2010-2016,the Moran index has generally fluctuated and increased.It first increased from 0.228 in 2010 to 0.251 in 2012.In 2013,it fell slightly to 0.241,and later in 2014 and 2015.In 2016,it remained at around 0.254 and remained stable,which means that the same-directional changes in the tax rate between regions have gradually increased,and the local government's tax competition shows a continuous competition of “competition in the end”.The results of panel data regression analysis show that local government tax competition has a positive effect on economic growth,which can promote the growth of regional internal economy,reduce the macro tax burden level of local regions,attract the reasonable inflow of production factors,and promote the local economy development.Fourth,from the aspects of improving the fiscal and taxation system,reducing the government's intervention in the economy,and optimizing the tax collection and management,the countermeasures and suggestions for improving the local government's tax competition are proposed.