From Taxation Planning To Financial Budget: An Analysis Of Establishing Process From The Perspective Of Game Theory

The taxation revenue in our country has been keeping increasing rapidly insuccessive years, compared with that in the early stage of tax sharing reform in1994,national tax revenue has increased up to18.8times in2012and tax revenue dominates85.8%of national financial revenue, which is a relative great proportion. Though thereare many systems and specifications in our country about taxation planning andfinancial budget, differences still exist between the planned target of taxation of taxauthorities and tax revenue target budgeted by government finance. Every year, thereare always recurring difficulties in the establishing process from taxation planning tofinancial budget.This paper attempted to make use of the theory, methods and tools of the gametheory, it took G district, which was a country and district level budget unit, as theanalysis object, it studied the games between government and tax authorities, superiorand subordinate tax authorities, who are the main decision-making participants in theestablishing process from taxation planning to financial budget, and investigatedsolutions. In the aspect of academic research, this paper further enriched the researchingperspective of game theory, it applied theories of operations research commonly used inthe field of economics and business management to the field of taxation and finance,which extended the theoretical category of public management; it determined therespective position of each participant in taxation planning management and financialbudget management and made up the research blank existing in the process fromtaxation planning to financial budget, it revealed the new perspective that the government and tax authorities shall strengthen their mutual communications andnegotiations and provided theoretical basis for the optimization of taxation planningmanagement system and financial budget management system.In this paper, changes and difficulties encountered in the process from taxationplanning to the establishment of financial budget were considered. It mainly appliedinvestigation method, literature research method, case study method, interdisciplinaryresearch method, mathematical method, qualitative analysis methods and other researchmethods. The introduction part first introduced the basic concept of taxation,taxationplanning and financial budget and the relationship between the three, it described thepuzzlement and difficulties encountered in the process from taxation planning to theestablishment of financial budget and proposed the train of thought and the researchsignificance to apply game theory to study this problem, it revealed that the researchcontent of this paper was a interdisciplinary research of public finance and operationsresearch and broke the boundary between taxation planning and financial budget, whichare two independent research fields. Chapter2introduced the concept and applicationfield of game theory, it analyzed the differences and association between cooperativegame theory and non-cooperative game theory and teased the mutual associationsbetween the four types of non-cooperative game theory, and finally, it summarized thecooperative game mode of cooperative game. Chapter3introduced the establishingprocess of taxation planning and financial budget, and then with the combination of thetwo, it analyzed the establishing process of taxation planning and financial budget inour country, and such comprehensive description is in short in current research field.Chapter4took G district for example, which is a country and district level budget unit,it first quantitatively analyzed the establishing process from taxation planning andfinancial budget with the two variable matrix of prisoner’s dilemma, and then made useof the bargaining model of dynamic game to research the target negotiation process andits influence, aiming at revealing the complete picture of the establishing process fromtaxation planning and financial budget from the perspective of game theory. Chapter5attempted to take advantage of the relative leading research direction of cooperative game theory, namely the cooperative game model, to analyze the feasibility to establishcity level general finance and taxation system, and made conclusion and proposed somesuggestions.