Transfer Payment Structures,local Government Tax Efforts And Quality Economic Development

The establishment of a new type of central-local fiscal relationship with clear authority and responsibility,coordinated financial resources and regional balance is one of the core elements of establishing a modern fiscal and taxation system,and the transfer payment system,as an important component of the modern fiscal system and an important policy tool to balance the fiscal relationship between the central and local governments,has increasingly become a key grip for optimising the central-local fiscal relationship.The "Proposal of the Central Committee of the Communist Party of China on Formulating the Fourteenth Five-Year Plan for National Economic and Social Development and the Visionary Goals for 2030" adopted at the Fifth Plenary Session of the 19 th CPC Central Committee not only clearly proposes to rationalise the fiscal relationship between the central and local governments and give full play to both central and local initiatives,but also further points out that building a new type of incentivecompatible fiscal relationship is a fundamental part of the division of powers and responsibilities between governments and an important aspect of modern national governance.It is also pointed out that building a new type of incentive-compatible fiscal relationship is a fundamental part of the division of powers and responsibilities between governments and an important aspect of modern national governance.The Twentieth Party Congress,directly from the strategic perspective of promoting Chinese-style modernisation,made "giving full play to the two positive aspects of the central and local governments and improving the fiscal transfer system" a key task in the reform of the fiscal system in the new era and new journey.At the same time,however,against the backdrop of the asymmetrical reverse movement of the Chinese style fiscal decentralisation of income and expenditure,the continuous increase in the fiscal gap has led to fiscal transfer payments often deviating from their essence,creating incentives for local governments to distort their own fiscal behaviour and fall into the "dependency trap" of repeated games in order to maximise their own interests,thus significantly affecting the process of achieving high-quality economic development.This significantly affects the process of achieving high-quality economic development.Therefore,in the continuous promotion of building a socialist modern state,how to guide local governments to regulate their own revenue and expenditure through the deepening reform of the fiscal system,so as to contribute to the establishment of a modern fiscal system conducive to high-quality development,is an urgent issue that needs to be addressed by the Chinese government.To this end,this paper will systematically explore the multiple roles and effects of the transfer payment structure,local government taxation efforts and high-quality economic development.The paper firstly explains the multiple mechanisms of interaction between transfer payment structure,local government tax effort and highquality economic development within the framework of Chinese fiscal decentralisation,and proposes that "transfer payment structure has an impact on local government tax effort" and "transfer payment structure The research hypothesis is that "transfer payment structure can not only directly affect high-quality economic development,but also indirectly affect high-quality economic development through local governments’ tax efforts".Secondly,a comprehensive indicator system is constructed based on the Five Development Concepts to scientifically measure and analyse trends in the quality of local economies in 30 provinces in China,excluding Tibet,Hong Kong,Macao and Taiwan.Again,a dynamic panel model is constructed to verify the impact of the transfer of payment structure on the extent of local governments’ taxation efforts.The conclusions show that the optimisation of transfer payment structure can promote the degree of tax effort of local governments.The results show that the optimisation of transfer payment structure has a negative inhibitory effect on the quality development of local economy,while the tax effort of local government has a positive promoting effect on the quality development of economy.The results of the standardised regression estimation of the panel coupled equation model reveal that: on the one hand,the transfer payment structure has a dual mechanism of action on high-quality economic development,i.e.the transfer payment structure can directly contribute to high-quality economic development and indirectly contribute to high-quality economic development through local government tax effort;on the other hand,the increase of local government tax effort can significantly promote On the other hand,an increase in the level of tax effort by local governments can significantly contribute to high-quality economic development.Finally,this paper proposes to establish a sound system for transfer payments,strictly regulate the revenue behaviour of local governments and optimise the performance assessment mechanism of local governments.