Study On The Main Category Of China’s Local Tax System Under The Tax-Distribution

Since the reform on the tax distribution in our country in 1994, our country has initially established local taxes system in conformity with market economics, and local tax revenue has been the main source of local government income. While at the beginning, the tax system design to increase the "two proportions". They prefer to guarantee the central taxes revenue, rather than the local taxes. After nearly two decades, local governments undertake more and more expenditure responsibilities while the central government gets more and more fiscal revenue. Local finance especially grass-roots government finance become abnormal distress. While the government tax revenue can’t match the local fiscal expenditure, the local government prefer to set fees and sell land to obtain finance revenue. Therefore, to rebuild the relationship between central and local governments, reasonable divide the local government powers to match local tax system, build the main tax of the local government, and correct the local government behaviors have become the urgent events currently. Because property tax has the basic features such as abundant tax sources, ease of levy and administration, it is suitable to select property tax as main tax of the local government. The paper get the conclusion that we should select the proportion tax as the local government main tax by referring the local main tax conditions in China and foreign experience. The article focus on measuring the earning ability of property tax, and analyzes the influence on residents tax. Then I get the conclusion that under the appropriate tax property tax can be local main tax after property tax reform completing. But at this stage we are changing the business tax to the added-value tax, the business tax gradually become atrophic. Local government tax revenue has been weakened and the disappear of the only large tax lets us to build local main tax urgently. Therefore we also should select the business tax as a transition. This article selects the plan which before the corporate income tax revenue sharing system reform to study the status of corporate income tax in local taxes. Finally this paper gets the conclusion that the corporate income tax can be the local main tax in transition period through building the model to predict the corporate income tax revenue. Finally I discuss how to optimize the property tax, so that the property tax can become the main tax of local government really.