Study On The Impact Of Local Government Tax Competition On Industrial Structure Optimization

The 20 th Party Congress report points out that the construction of a modern industrial system should be accelerated to promote the economy to achieve effective quality improvement and reasonable quantitative growth.Optimizing and upgrading the industrial structure is a key factor in promoting high-quality economic development.As an important means of national economic macro-control,tax policy can reasonably and effectively guide the layout of regional industrial structure.With the advancement of tax reform,local governments have been competing with each other for tax revenue and official promotion.Moderate tax competition can help guide the cross-regional flow of production factors such as capital,labor and technology,thus enhancing the efficiency of resource allocation and providing strong support for the optimization and upgrading of industrial structure.However,in practice,local governments have adopted a series of non-compliant means such as disguised tax exemptions,levies before rebates and flexible tax collection and management to trigger "bottom-up competition" among regions,which not only causes the loss of regional tax sources,but also leads to the disorderly flow of production factors and economic resources,thus adversely affecting the optimization of industrial structure.By summarizing the established literature at home and abroad and combining the real situation of local government tax competition and industrial structure in China,this thesis analyzes the mechanism of the role of local government tax competition in influencing the optimization of industrial structure.This thesis uses balanced panel data of 30 provinces(municipality,autonomous region)from 2008 to 2020 to conduct an empirical test to investigate the factors of local government tax competition affecting industrial structure optimization and to propose policy recommendations for regulating local government tax competition.The research of this thesis is divided into six chapters,as follows.The first chapter is an introduction.It introduces the background and significance of this thesis,summarizes the domestic and foreign literature on local government tax competition and industrial structure,and introduces the research content,methods and possible innovations and shortcomings.The second chapter is the theoretical foundation.The concept of local government tax competition and industrial structure optimization is defined,the theoretical basis of local government tax competition and industrial structure optimization is explained respectively,and the mechanism of the effect of local government tax competition on industrial structure optimization is analyzed.The third chapter is the analysis of the current situation.It introduces the manifestations of local government tax competition,and measures the level of regional total tax competition,turnover tax competition and corporate income tax competition.The fourth chapter is the analysis of problems and causes.Specifically,it introduces the current problems of local governments,such as violation of tax statutory and fairness principles,serious loss of tax sources,and reduction of resource allocation efficiency,and analyzes the causes from the aspects,such as unsound fiscal and taxation system,imperfect assessment mechanism and lack of coordination among governments.The fifth chapter is the empirical analysis.This thesis uses a two-way fixed effects model to empirically analyze the impact of local government tax competition on industrial structure optimization,and conducts robustness tests and heterogeneity analysis.This article explores the impact mechanism of local government tax competition on industrial structure optimization by adding two regulatory variables: infrastructure construction and industrial agglomeration.The sixth chapter provides policy recommendations.Based on the problems of local government tax competition and the empirical results,corresponding policy recommendations are proposed to regulate local government tax competition in order to reasonably guide industrial structure optimization,mainly including deepening the reform of fiscal and taxation system,improving the government performance evaluation mechanism,regulating undesirable tax competition behaviors,strengthening inter-governmental communication and cooperation,and accelerating the market-oriented reform.The research finds that:(1)local government tax competition has a significant inhibitory effect on industrial structure optimization.(2)By tax types,both turnover tax competition and corporate income tax competition significantly inhibit industrial structure optimization,but corporate income tax competition has a greater inhibitory effect.By region,tax competition in coastal areas has a smaller inhibitory effect on industrial structure optimization compared with inland areas.By degree of marketization,compared to regions with low marketization,tax competition in regions with high marketization has a smaller inhibitory effect on the optimization of industrial structure.(3)Improving the level of infrastructure construction and industrial agglomeration can effectively weaken the negative effect of local government tax competition on industrial structure optimization.