China's fiscal transfer payment discuss several issues

[Abstract] China's fiscal transfer payments to the most important goal is equalization of basic public services, the equalization of basic public services and service levels should work with China's Economic development level, affect people's survival and development of public services should be given priority, the impact It's a fair starting point should be to achieve a higher level of public services. China should establish a vertically oriented, criss-cross pattern of transfer payment, transfer payment transfer payment, according to the objectives set China's current transfer payments effect is not ideal, the direction of reform is: the main general transfer payments, expenditures for improving the standard indicators, develop indicators of special allocation of transfer payments, cancel the tax return.

[Keywords:] of basic public services, equalization, general transfer payments, the standard spending, vertical mode of transfer payments

Since China adopted the reform of the tax system, the central and local fiscal transfer payments grew rapidly in 1994 and 238.909 billion yuan in 2008 increased to 2.294561 trillion yuan in the past 10 years, financial transfer payment system has been a theoretical discussion of China's scholars a hot issue. I looked at a lot of literature, the study found that domestic scholars focused on our goal of transfer payments, transfer payments, models and methods, empirical test results and transfer payment transfer payment program design in four areas. This will be sorted out already based on the idea of ​​literature, to explore these issues further.


First, the issue of equalization of basic public services

Central and local transfer payments has four main objectives: equalization, correction of inter-jurisdictional spillovers, and enhance the country's political control over local affairs and the completion of the central commission (Wang Yuan, 2009), where the goal of equalization is the most important, but also domestic scholars to explore the key. equalization precisely should be the equalization of public services, there are two main aspects need to be clear: First, determine the need for equalization of public services, and second, to determine the degree of equalization.

On the need for equalization of public services, there are two possibilities: First, all the public services provided by the Government include; the second is only included in the basic public services. Li Jinshan, et al (2008) that the equalization of public services is a dynamic concept, over time, changes in the Economic development and continuous adjustment of the "equalization of basic public services" to a "general equalization of public services," and finally enter " the final equalization of public services. "domestic scholars in the early stage," equalization of public services "target (Liu Rong Chang, 1996), but the range of public services is not stressed, as discussed in depth, and gradually realize the scope of public services should be limited, so the literature is mainly made after the "equalization of basic public services" (Zhu Ling, 1997), the party's recent Sixth Plenary Session of the officially defined "progressive realization of basic public services" of the goal, therefore, the focus falls on the domestic academic study of basic public services should include the specific scope.

Domestic scholars on basic public services should include the specific scope of the dispute. Liu Shangxi (2007) that basic public services can be understood from two perspectives: First, with low levels of consumption needs are directly related to the second, no difference in people's consumption demand. Basic public services with time, place, current major for education, health and housing. Ripa (2007) that basic public services are those with the right to human survival and development of relevant, provided by the Government, to be protected effectively by the government finances public services, public service projects in various is the foundation of an important Economic and social significance of public services. An eutrophication, etc. (2007) to the domestic basic public services for the formulation summarized in three perspectives: First, closely related to livelihood issues directly with the public service, two is a pure public service, three is a certain stage of development on the lowest range of public service, but he does not agree with any of them a view of basic public services should be made with the people's livelihood is closely related to pure public service and many The literature also with examples of ways to express our current range of basic public services.

The degree of equalization, Ripa (2007) summed up the practice of States per capita equalization of financial resources, public services and basic public services, standardization of the minimum fair, three basic modes. China Financial Society Task Force (2007) that the initial stage of the goal of equalization is to achieve regional equalization of public services, the intermediate stage is to achieve the equalization of urban and rural public services, advanced stage is to achieve full equalization of public services, and made five operating modes : fiscal revenue capacity equalization mode, the equalization of expenditure patterns, population equalization mode, the revenue and expenditure equalization mode, the limited revenue capacity of an expenditure needs equalization mode. An eutrophication, etc. (2007) will be summed up as three kinds of standards: minimum standards, the average standard, equality of results, and that the three standards is a dynamic process of Economic development level and financial level is not high enough in the case, beginning first at a low level of security at the end, and then increased to moderate level, the goal is to achieve equality of results.

I believe that basic public services and to determine the degree of equalization is a dynamic process, should a country's Economic development level in the lower level of economic development, basic public services should include only those that affect people's survival and development based projects, and to adopt a lower standard, with the economic development level rises, continue to broaden the scope of basic public services, standards are rising, when the very high level of economic development, basic public services will eventually expand to include all public services, and the adoption of an average standard in a particular level of economic development, basic public services all projects can use different criteria, namely, at the same point in time, some projects using minimum standards, while other projects may use the result is fair.

China's vast territory, around the level of economic development vary widely, the overall level of China's economic development is not high, the state can control the context of limited financial resources, the equalization of all public services in the scope of the conditions are not met, therefore, the equalization Public services should be limited, and different degree of equalization of public services should be different. our country into a real sense to target only the general equalization transfer payments, so we can <<2008 central and local general transfer payment methods>> find the implementation in practice of our basic public services and the degree of equalization in the calculation of standard expenditures, the <<method>> selected items are: administration, public security, education, sports broad , health, agriculture, forestry, urban maintenance, capital construction, retirement, village-level management and other expenses, which is meant the goal of equalization of basic public services in the calculation of standard expenditures for each project, using the national average standard level of expenditure, which is the goal of equalization equalization level. I believe that our practice approach, while simple, but there are many problems, such as the forestry, retired as a separate item listed, but environmental protection, social security and science and technology and other important items have not been listed separately, all projects using the national average standards, not according to the current level of China's economic development sub-project identification and so on.

In my opinion, should be to determine the degree of economic development and basic public services, the scope and degree of equalization of the first, clear the central government for the goal of equalization of the transfer-payment sum. In theory, public goods and private goods there is an optimal portfolio, pursuant to calculate the government should control the resources, then the central control by calculating the proportion of revenues the central government revenue, minus the central government spending and other targeted transfer payments, and the remaining part is the target for equalization The total transfer payments in the practice can take advantage of the macro-rate of GDP and government-controlled resources. Second, the constraints of the total transfer payments to determine the scope of basic public services and equal degree. of public services to people affected differently, for that affect people's survival and development of public services should be given priority, followed by the impact on economic development, and finally needed to influence people to enjoy from the extent, affect people's starting point should be reached fairly high levels of public services, and other aspects public service in the lower level of economic development can be a lower level.

Based on the above ideas, the author of China's current equalization of basic public services to determine.


Second, China's transfer payment mode and manner of selection

Fiscal transfers are only two basic modes: vertical and horizontal transfer payments
To transfer payments from the theory, the vertical transfer payments used to solve the intergovernmental division of powers and financial authority caused by the asymmetry between the lower levels of government revenue capacity and expenditure responsibilities the problem of asymmetric horizontal transfer payments mainly used to solve because of the ability of regional differences between the revenue and provide the same cost of public services caused by differences exist between the level of public services in areas of imbalance (Liu Rongcang, 2002) due to the central and local division of financial authority and powers, and there is no absolute standard, the financial ability of the region can be both directly to the weak areas of horizontal fiscal transfer payments, may also be in the initial allocation of revenue for a larger part of the central government, making the financial ability of the region has vertical through the central government transfer payments to weak areas of fiscal transfer payments, so in practice in the world, there are two main transfer payment modes: a single longitudinal mode and criss-cross pattern. have their own advantages and disadvantages of two modes: a single longitudinal mode operation is relatively simple, completely above the level of government-led, however, mandatory flatted, transparency, more or less affected; criss-cross pattern under the auspices of the Central Government, the implementation of some transfer payments absorb the local government directly involved, and by the local government to contribute to the results of calculations by law to accept the aid directly to local governments to allocate funds, increasing the area of ​​friendship and mutual support between the colors, so that the areas which contribute to a sense of honor, to accept the The region also have a spur aid effectiveness (Lijie Gang, 1995). domestic scholars should adopt the model of our different views, and some advocate a single longitudinal mode (Zhong Xiaomin, 1997), and some advocates criss-cross pattern (Liu Rongcang , 1996), and the idea of ​​vertically oriented, criss-cross pattern (An eutrophication, 2007).

I believe that our tax system reform introduced in 1994, the central government has a large property (basically more than 50%), and local governments bear the major powers (basically 70%), which determines the transfer of our payment mode should be the main longitudinal course, the existing transfer payment, our financial resources of the region is still quite poor, so rich regions to poor regions of the lateral transfers are necessary, but should help with specific projects based.

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Combinations of transfer payments, Liu Rongcang (1996) transfer payments into the general transfer payments, transfer payments and special classification of three types of transfer payments, and that China should focus on general transfer payments, transfer payments relative to special match to the special nature of transfer payments to supplement the security body Fu (2007) to our transfer payments into the tax return, general transfer payments, transfer payments and other special four types of transfer payments in favor of China should be of general transfer payments to primary, special transfer payments, supplemented by Wang Yuan (2009) to our transfer payments into tax rebates, financial transfer payments and special transfer payments, and transfer payments that generally used to achieve the goal of equalization, and correcting spillovers between jurisdictions strengthen the country's central political control and the completion of objectives entrusted to the local affairs is mainly done by a special transfer payments, so China should adopt a general transfer payments and special transfer payments both Wang Yong-jun et al (2002) advocated the establishment of the equalization transfer payments based, supplemented by special funding system.

Domestic scholars on various forms of financial transfer payments by major categories of statistical analysis is carried out, can be found from the statistical data, tax rebates and other vested interests to take care of the local share declining, while the financial transfer payments, transfer payments rose more than special faster, increasing the proportion, such as various forms of 2007 and the proportion of the total, respectively: two tax refund 321.48 billion yuan (18.6%), income tax return of 90.63 billion yuan (5.2%), financial transfer payments 701 720 000 000 million (40.5%), special transfer payments 618.69 billion yuan (35.7%) (Sun, open, 2009), but according to major categories of statistics does not reflect China's basic public services, transfer payments to achieve the goal of equalization Wang Yong Jun (2006) that China's current transfer payments in the form of equality as the goal of truly only general transfer payments, transfer payments due to the need of special support and central management capabilities of local issues and has the reverse effect of equalization, transfer payments to ethnic minority areas, contrary to adjust the salary transfers Equalization intention, the reform of rural taxes and transfer payments and the "three rewards and one subsidy" effect of the equalization transfer payments is uncertain. In addition, the central government transfer payments to provincial governments generally can not guarantee to provide the local government area basic public services, so some scholars have pointed out that the transfer payment should be the focus of the administrative jurisdiction of county and township governments and village life in rural low-income groups (Zhu Ling, 1999), the object of the equalization transfer payments should be clearly defined for the County class area, at least the main area for the county, especially in poverty-stricken counties (Wang Yong Jun, 2002).

I believe that our current way of transfer payments, tax rebates and transfer payments do not match the target, should be canceled, of course, in the reform to reduce resistance in the division of powers, compensation, such as a greater proportion of shared taxes to local, introduction of new local taxes, etc. special transfer payments should improve metrics, reducing the freedom of the distribution of funds. the most formal of general transfer payments, should become the main transfer payment. In short, the transfer payment transfer payment options should be based on objective set.


Third, the effect of China's transfer payment problem

China's transfer payment has been 15 years of practice, the actual use of our domestic scholars transfers data tested transfer payments and economic convergence, the relationship between local fiscal effort and the effect of equalization transfer payments, specific testing methods and conclusions as shown in Table 4 .

Can be seen, most of the empirical test shows that our results were not satisfactory transfer payments, mainly as follows: in our existing way of transfer payments, tax rebates and special transfer payments ineffective, transfer payments and other consideration is not reasonable.


Fourth, the transfer payment program design

Most scholars advocate of the various areas of the financial gap to allocate transfer payments, there are three key points here (1) can be used to determine the target amount of money transfers from the existing literature point of view, few scholars to conduct detailed study, the author claims have been made in the above, not repeat (2) determine the criteria for regional income domestic scholars have proposed specific programs, many of the use of alternative indicators related to project, but I agree with the <<2008 Central general transfer payment to local>> of the estimation method, which taxes were calculated by using methods that are accurate and feasible (3) determine the criteria for regional spending, which is the core of the problem from the existing literature point of view, most domestic scholars of China's fiscal expenditure will be divided into several categories, set weights, and then select a sub category index calculation. The author argues that the target under the transfer payment, provided assistance to the provision of public services and should reach the level of service to calculate standard expenditure. Specifically: the goal of equalization transfers, the standard expenditure = Σ (a public service × the total unit cost of public services) in which public services can not simply by the total per capita number of public service and the product of the total population get, because most public services within a certain range with a non-competitive, so the total amount of public services to be provided with the total population is not a simple linear proportional relationship not only with the total amount of public services related to the total population, but also by the impact of population density, the unit cost of public services is also affected by several factors, such as climate, topography and other natural environmental factors, land area, level of economic development, etc. for the correction of spillover effects between the target area of ​​transfer payments, need to identify the impact of spillover effects size factors, such as forestry and water affairs to select an area of ​​arable land, woodland area and food production and other indicators, science and technology to select the number of patents and technical personnel and other indicators for enhancing the country's political control over the target of transfer payments, you need to clearly state care interest groups, such as ethnic minorities can be selected population, area, and other indicators, backward areas can be selected population, per capita income and other indicators.

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