| A Tax-separation Finance System Change has been implemented in P.R. China since 1994, which has been an important part of building a modern socialism market economy and public finance system. After a few years' operation of the new finance system that showed many progresses, some questions and conflicts have occurred with focus on the irregularity and low efficiency of the local finance system. Therefore, the local finance system improvement-drive has become the key issue for realizing the Tax-separation Finance System upgrade completely. Herein, this study described and commented on the current status of the local finance system, considering the standard authority-separation theory as well as the current situation in our country, an in-depth local finance system change beyond the current status is then discussed with proposal on how to improve the local finance system with considering of improving the other related policies.The first section of the thesis analyzed the current status of the local finance system. First, the general situation of the current local finance system was introduced, followed by comments on the separation of the administration from the accounting, the separation of the tax, the local income beyond the regulation and budget, intergovernmental fiscal transfer based on the power-separation theory considering the reality of our current: 1. On the administration from the accounting, although the official distributions between the central federal government and the local provincial government follow the basic rules, there are many deviations from the rule in the actual applications. The situations below the provincial level presented even more challenges and usually are highly irregular. 2. Onthe separation of the tax, the tax separation strategy between the central federal government and the local provincial government appears to be reasonable currently. However, the tax separation below the provincial government exhibits several problems, including the incomplete types of major local tax and too many shared taxes. Furthermore, the lack of the local tax-legislation power is a major result of some unreasonable tax distribution relationships among different levels the governments. 3. The local income beyond the regulation and budget itself does notbelong to the major content of the local finance system. However, the malicious development of this problem is the direct result of the imbalance between the administration power and the fund dominant power of the local government. 4. The current intergovernmental fiscal transfer below the provincial level and from the federal central government to the provinces have the same problem since they all largely depend on the existing modes of fiscal transfer. The extent of equalization transfer is relatively small and therefore hardly touches the previously obtained benefits of various levels of local governments.The second part of this thesis explored the source of the problem using the background of the system transition as a major thread. The systematic factors that contributed to a number of local finance system problems can be divided into the following aspects: 1. The conflict between the power separation and the relatively centralized power, It showed mainly as the disharmony between the power-separated finance system revolution and the relative centralized polity system as well as the conflicts among the internal distribution among the various government departments. This is one of the major reasons that the genuine tax separation policy is difficult to be realized by various levels of local government. 2. The incomplete democracy system. The tax-payers can not monitor the government behavior effectively. 3. During the transition period, the lack of many policy systems leads to various of irregular regulations and behaviors including the local income beyond the budget. 4. The government function transition is difficult to complete, therefore limits the government power separation of the administration. 5. The previously obtained benefits are ano... |
