Tax The Right Of The Vertical Division Of Reflection And Reconstruction

China's economic and social development is facing a series of deep-rooted contradictions, such as irrational economic structure and growth mode is extensive, the income gap is too wide among members of the community and so on. While the emergence of these problems are to the special new stage of China's economic and social development has entered, but system failures, in particular, the tax-sharing system is flawed and does not play its rightful economic regulation and income distribution function played a major role. Since 1994, China has been reforming its tax-sharing system in order to solve the problems of the vertical division of taxing power. However, in the process of the tax-sharing system operation, China's tax-sharing system reform faced a series of contradictions and problems for the reasons of the unbalance among regional economic development and the lack of government responsibility division, local tax system construction, government structure reform, etc. The reconstruction of vertical division of taxing power, directly related to the division of the expending responsibility between governments, is a bottleneck problem in the reform of financial relationship between governments in China. So the study of the vertical division of taxing power is very important both of theory and practice.The issue on how to define the taxing power should be examined firstly in this paper. The taxing power, in order to provide the public goods to the taxpayer, means the power for the country to raise tax according to law. It is divided into the tax legislative power, and the power to tax collection and management, tax benefit. The tax legislative power includes the power to draft, amend, explain and rescind the tax laws. The power to tax collection and management is crucial for guaranteeing the resources to be transferred from private sector to public sector. The power to tax benefit is an accessory to the power to tax collection and management. As to the tax revenue for transfer payment, the power to tax benefit can be divided into preliminary one and ultimate one.After the taxing power being clarified, it comes to why the taxing power should be divided vertically? All of economists, political scientists and jurists have made unremitting efforts in trying to answer this issue. In the view of economics, it is efficiently for local government to provide local public goods by vertical division of taxing power, taking account of taxpayers' preference. From politics perspective, based on the guarantee of local taxpayers' basic rights, local taxing power should be limited under the control of local taxpayers. Seeing from the law, the fundamental goal of vertical division of taxing power is to construct modern tax law system, which uses the guarantee of taxpayers' basic rights as the center, eliminates dominant position of the state during taxation and rebuilds the justifiability of taxing power in the value of democracy.Certainly, the vertical division of taxing power is not uniform or fixed. Changes in the vertical division of taxing power are constantly to meet the needs of economic and social process. In the recent 14 years, China has initially laid a foundation for local tax system through the reforms of the tax-sharing system. However, there are still some problems in vertical division of taxing power, such as the lack of local tax legislative power, the conflicts of local power to tax collection and management, the confused of local power to tax benefit. Meanwhile, changes in the vertical division of taxing power have their own particular path, and path-dependent evolution reflects the characteristics. So far, there are still several drawbacks in the vertical division of taxing power: the pattern of unified leadership and classification management under the unitary system, the indefinite of the routine power and the expending responsibility of governments, the excessive regional gap, the mechanism friction in the period of economic transition. These issues constitute the main barrier of reconstruction of vertical division of taxing power in China. So the reconstruction of vertical division of taxing power is a gradual historical process, which is not easily achieved within a short time.The vertical division of taxing power is the core of China's tax-sharing system. As a kind of exotics, it is necessary to learn from western market economy countries, during the reconstruction of the vertical division of taxing power in China. When we turn to the U.S., Canada, Australia, Germany, France, U.K., Japan, the paradigm of modern market economy, we find the vertical division of taxing power have similarities and differences in the western market economy countries. Among them, the differences are due to their own regime form, economical and cultural background. The similarities mainly include: making efforts to the combination of dominant central taxing power and moderate local taxing power, normalization and science, fully considering the routine power and the expending responsibility of local governments, paying attention to mobilize the enthusiasm of local governments in taxation.Finally, based on the vertical division of taxing power theoretical judgments, the problems exist in our current tax-sharing system. The goal is to reconstruct our vertical division of taxing power in this paper: reinforcing the public service capacity of local government, establishing a long-time effective management system for the control of taxing power, and setting up a standard local tax-sharing system gradually. China's reconstruction of vertical division of taxing power should follow the principles of adaptation, efficiency, benefit principle combining the principle of routine power and financial power. From the above goal, this paper presents five recommendations to reconstruct China's vertical division of taxing power, including retrenching government levels, defining the routine power and the expending responsibility of governments, improving the local tax system and the legal norms of local taxing power, running a trial implementation of classified local tax-sharing system, improving the legal system of the financial transfer payment.In summary, the paper tries to make some breakthroughs by researching on the vertical division of taxing power, from theory to practice and from law to economic. There are two paralleling threads through the whole paper. From theoretical aspect, it is democratic public finance, and the taxing power should belong to the people. From practical aspect, the centralization is needed urgently. Thus, our idea model will neither be the theoretical fantasy, nor the practical alienation, but the compromise of the both.