The Impact Of Geographical Distance On Tax Competition

In recent years,the Chinese government has issued many preferential policies for tax reduction and fee reduction,resulting in a serious reduction in fiscal revenue,but the amount of fiscal expenditure is still rising,resulting in a more serious fiscal deficit.At the same time,the problem of resource allocation is prominent,and there are phenomena such as insufficient supply of public services and distorted market prices.On the one hand,the existence of tax competition will lead to the actual tax rate lower than the nominal tax rate and the suboptimal tax rate that can not meet the supply of public goods,which will lead to the erosion of the tax base and the loss of tax resources.On the other hand,it will also distort the allocation of space resources and block the process of industrial transformation and upgrading.At the same time,the tax competition of local governments will lead to information asymmetry between the central and local governments,and the fiscal and tax policies formulated by the central government will not be effective.Therefore,mastering the tax competition relationship between local governments can not only optimize the central and local financial system,but also give full play to the financial function in national governance.Since its establishment,the development zone has enjoyed various preferential policies to attract the inflow of a large number of enterprises and bring competitive pressure to the surrounding areas of the development zone.By analyzing the tax competition of local governments around the Development Zone,we can better understand the current situation of local fiscal and tax competition in China.In this thesis,based on the four boundaries and boundary information of China’s economic and technological development zones and high-tech zones,combined with the relevant data information in the industrial enterprise database,the impact of the construction of national development zones on the tax competition in the surrounding areas is analyzed by using the nonlinear regression model.Through the empirical analysis results,it can be seen that due to the competitive advantages of the Development Zone,local government officials in the surrounding areas of the Development Zone,in order to avoid the loss of tax sources,used "collection and management efficiency" as a strategic tool to reduce the actual tax burden of surrounding enterprises,thus forming a bottom-by-bottom tax competition situation,which is specifically reflected in the "inverted U" relationship between the distance between enterprises and the development zone and the actual tax rate of enterprises,It shows that the closer to the National Development Zone,the more intense the tax competition.It is further found that for different types of enterprises,the tax competition strategies adopted by local governments are also different.Specifically,the distance between enterprises and national development zones has no significant impact on the effective tax rate of large enterprises,mining industry,enterprises in key polluting industries and enterprises in non key supporting industries,and has a significant impact on small and medium-sized enterprises,power,heat,gas and water production and supply industries,non polluting enterprises,enterprises in key supporting industries and enterprises in general supporting industries,And the impact on enterprises with technological innovation is more significant.At the same time,financial subsidies are also one of the main means for local governments to carry out tax competition.There is an obvious "U" relationship between the distance between enterprises and development zones and the financial subsidies obtained by enterprises.Finally,the tax competition of local governments around the development zone does promote the investment income of enterprises,but it also provides tax avoidance space for enterprises in other regions,resulting in the loss of tax sources in other regions.On the basis of empirical test and theoretical analysis,this thesis provides relevant suggestions to alleviate local government tax competition.First,restrict the preferential fiscal and tax policies of the development zone;Second,improve the construction of grass-roots financial system,and reasonably distribute the powers and financial resources of local and central governments;Third,optimize the assessment mechanism of local governments and reduce the pressure of local investment;Fourth,strictly regulate tax law enforcement,strengthen the standardization of tax law enforcement,and maintain the independence of tax law enforcement.