Research On The Economic Growth Effect Of Tax Competition Among Local Governments In China

In 1994,the tax system reform divided the financial power and administrative power of different levels of government in China,and in fact,established the assessment system of local government with economic performance as the core.Since then,the competition between local governments for economic resources and tax resources has become increasingly fierce.Orderly and reasonable tax competition can reduce the actual tax burden and the operating cost of enterprises in the region,accelerate the flow of factors and improve the efficiency of government work,so as to attract investment of enterprises.However,excessive and unreasonable tax competition may lead to problems such as tax neutrality distortion and tax base erosion,which will further widen the development gap between regions and ultimately hinder economic development.The construction of a good tax competition order plays an important role in the improvement of China's tax system and the healthy economic development.Foreign literatures were summarized and combined in this article in the connotation of tax competition,classification,the use of policy tools,and the relationship with the economic development.The system of tax competition between local governments in China,the characteristics of framework,and the present situation have been carried on the detailed analysis.This article adopt the method of theory combined with empirical measurement model,select panel data for 30 provinces(cities,districts)in China from 2007 to 2017,then the regression model was established.Finally,according to the empirical conclusion,some Suggestions are put forward,such as deepening the reform of fiscal and taxation system,promoting the standardization of tax administration system and so on.