Thirty years have passed since the Tax Sharing System was implemented in China in 1994. China’s first Tax Sharing System started in the early 1900s.
At the end of the Qing Dynasty, the limits of maintaining the centralized financial system until bef...
Thirty years have passed since the Tax Sharing System was implemented in China in 1994. China’s first Tax Sharing System started in the early 1900s.
At the end of the Qing Dynasty, the limits of maintaining the centralized financial system until before were revealed. It can be said that the Tax Sharing System, which was discussed at this time, was not a measure to reduce centralized taxation to local governments, but a measure to restore taxation originally dominated by the central government. It can be seen as a fiscal policy legalized through law to re-secure the central tax revenue stolen from local powers. This proves that the success of the Tax Sharing System depended on the central military and political power that could eventually overwhelm the local powers.
In this paper, the factors for the introduction of the Tax Sharing System were first identified as the emergence of local powers and the expansion of warlords. The Tax Sharing System was chosen as a policy to overcome the chaotic financial difficulties that arose as the centralized financial system collapsed. On the other hand, the enactment of laws and the inflow of new religious beliefs were identified as factors.
If the 1994 Tax Sharing System was implemented to achieve macroeconomic and social goals, such as resolving regional disparity under a perfect national system, the Tax Sharing System implemented in modern China, where power was not stabilized by local powers, could lead to the existence of the central government. There is an important difference in that it was related to In the end, the Tax Sharing System system did not take effect properly, so it was not possible to seize local financial rights, which served as a factor in the expansion of the intervention of the powers.