| The reform of tax-sharing system,which began in 1994,reshaped the fiscal distribution system between central and local governments.This tax reform,in the form of formal rules,divides most of the taxation rights to the central government,while the corresponding responsibilities have not been matched,hence,it has a strong tendency of centralization.The main part of the local government's financial resources--consumption tax,value-added tax and income tax--has been redefined as the central exclusive tax or sharing tax between the central and local government at a certain proportion.In contrast,the central government has given the local government a lot of responsibility for fiscal spending in the form of solidification or statutory form.Under the circumstances of "shifting property rights and decentralizing responsibility",local governments face severe financial pressure.In order to solve the financial difficulties brought by the reform of the tax system,local governments have embarked on the road to make up the local fiscal gap by relying on land sales revenue.After the reform of the land market management system,the local government has actually monopolized the land market.Driven by huge land transfer income,local governments at all levels have gradually formed a set of "land finance" mode around land resources.Under this mode,local governments either obtain huge land transfer fee income,relevant tax revenues,and financing income from land capitalization operations in the short term,or use land as a subsidy to attract investment,so as to obtain output and tax revenue from economic growth in the long run.It is true that the formation and promotion of land finance has effectively eased the financial pressures of local governments,and accelerated the process of industrialization and urbanization in China to a certain extent,and promoted the growth of local economies.However,the local government's control of the land market has also led to a series of problems such as the rapid rise in land prices,the increase in the real estate market bubble,and the accumulation of financial risks.Based on this,this dissertation starts from the background of tax-sharing reform and China's land finance system,and combines China's reality with a combination of theoretical and empirical methods to explore the impact of local fiscal gaps on the government's land fiscal behavior under the tax-sharing system.From the three aspects of the local government's land revenue,the mode of local governments' transfer of land use rights,and the behavior of local governments' fiscal liabilities,this dissertation examines the impact of fiscal gaps on the land finance behavior of local governments under the existing fiscal and taxation systems.In addition,this dissertation further clarifies that the incompleteness of tax-sharing reform and the expansion of local fiscal gap are the determinants of high prices in the real estate market and the expansion of local debt,and land finance is the means by which local governments pass fiscal gaps to residents who buy houses.The main conclusions of this dissertation include the following:Firstly,the incomplete reform of the tax sharing system and the expansion of the local fiscal gap are important reasons for the expansion of “land finance”,which has further led to the rise of land prices and housing prices and the expansion of local government debt.Chapter 2 of this dissertation theoretically sorts out the historical evolution of China's financial system,and analyzes the characteristics of the fiscal and tax distribution relationship between the central government and local governments under different fiscal and taxation systems.The study finds that the tax-sharing reform of 1994 brought local governments financial resources dilemmas in which financial power and financial responsibility did not match.This led to changes in their incentive and restraint mechanisms,which led local governments to seek other ways to expand their financial resources.At the same time,the central government has implemented a political promotion system with the core of economic construction.With this incentive,local governments have formed a unique "land finance" model in the world."Land finance" has not only become a powerful tool for local governments to ease its fiscal pressure,but also opens up new shortcuts for local governments to develop the economy.Theoretically speaking,under the current fiscal decentralization system,in addition to directly promoting the rise in land prices,the land finance model will also indirectly affect house prices by changing the government's land-supply behavior and the behavior of real estate developers,triggering an irrational development of the real estate market.Secondly,the expansion of the local fiscal gap under the tax sharing system will lead to a significant increase in the explicit revenue obtained from land finance.Chapter 3 of this dissertation defines the land fiscal revenue.It divides the land fiscal revenue into explicit income represented by local government land use right transfer proceeds,land related taxes,and invisible income represented by debt financing income.According to this standard,we use data from the provincial administrative units in China from 2005 to 2015 to calculate the explicit fiscal revenue of the provinces.Afterwards,we use this data to verify the role of local fiscal gaps in the promotion of the scale of land fiscal explicit revenue through using a panel data model.At the same time,the results of this study still remain robust after considering possible inter-group correlations and possible endogenous issues in the estimation model.Therefore,this dissertation believes that the expansion of the local fiscal gap can significantly increase the size of the government's land finance explicit income.Thirdly,the local fiscal gap has a structural impact on the government's land fiscal behavior.As the fiscal gap widens,local governments will pay more attention to immediate interests and lead to an increase in the scale of land sales.At the same time,local governments will also tend to use auction to sell land use rights at high prices rather than using listings to subsidize land prices.In addition,the local government's land transfer behavior is affected not only by local economic factors,but also by the land transfer behaviors of neighboring provinces and the provinces with similar levels of economic development.In Chapter 4 of this dissertation,we use the provincial panel data of China to establish the spatio-temporal dynamic panel measurement model to verify the above conclusions.We find that the local fiscal gap has a significant impact on the government's land finance scale and land transfer methods during the sample period.Firstly,the larger the fiscal gap within the budget is,the more local governments tend to increase land transfer revenues to fill the fiscal gap,that is,financial pressure has,to some extent,led to an increase in the size of local land finance.Secondly,the expansion of the fiscal gap within the budget will also change the local government's preference for the way of land remising.The greater the size of the fiscal gap within the budget is,the more local governments tend to sell land by way of auctions will be,thereby boosting land prices.Finally,the spatial correlation of local government land transfer behavior is significantly positive.Fourthly,the expansion of the local fiscal gap and the increase in investment scale will also push up the government's implicit land revenue,which will increase the scale and risk of local debt.Chapter 5 of this dissertation starts with the invisible income of land finance and analyzes the impact mechanism of local fiscal gap and local government investment impulse on the financing behavior of “City Investment Bonds”.The results show that the expansion of the local fiscal gap has a significant effect on the scale of the issuance of “city investment bonds” by local governments.This dissertation selects provincial-level panel data from 2009 to 2016,and builds an individual fixed-effects model to verify the role of local government fiscal gaps and infrastructure investment in promoting the issuance of “investment bonds” by local governments.The study finds that the local fiscal gap has a positive impact on the scale of local government debt and the willingness to issue bonds.Moreover,competition among local governments also has a positive influence on local government debt.It can be manifested that the investment in fixed assets has a positive effect on the willingness of local governments to issue “City Investment Bonds” and the scale of bond issuance.After controlling the factors such as the size of local GDP,urbanization rate,price level,and construction land growth,this research conclusion has not changed.Based on the above analysis,this dissertation proposes that the current system should be reformed from the aspects of improving China's fiscal and taxation decentralization system,perfecting the local government assessment mechanism,regulating land transfer modes,controlling local debt risks,and suppressing irrational fluctuations in housing prices,so as to further rationalize the distribution of fiscal and taxation between the two levels of governments of our country,prevent the outbreak of financial risks,promote the efficiency of the use of land resources and the healthy development of the real estate industry. |
PDF Full Text Request