Fiscal Decentralization,Transfer payments and Local-tax Income:An analysis with Inter-provincial Panel Data from 1985 to 2006

economic growth can promote the growth of government non-tax income,the growth of non-tax revenue will also be counter-productive to economic growth;if to examine the acting forces of the non-tax revenue of the central and local governments on the economic growth,it can be found that there is a more close relation and stronger interaction between the local non-tax revenue and economic growth.

Through analyzing the present situation of the private economy,this paper probes into some factors restraining the development of the private economy,and studies on the boosting function of the local tax in promoting the development of the private economy.

Because of the efficiency loss in the game between local government and central government and the improper difference between nominal tax burden and actual tax burden,the principal part of local taxes produces different influence on regional economy.

The paper makes a positive analysis of the relation of local tax income and regional economic growth.

Studies show that to carry out local taxation reform under the system of divided taxation,to establish the reform goals for near and far future,to raise the efficiency of taxation and validity of local government functions will be helpful in the perfection of China s legal system .

The local taxation authorities adopt tax lever to promote the third industry development,in Zhongshan city.

Maximizing the functions of the local taxation,utilizing the tax to promote the development of the third industry,improving productivity and efficiency and nurturing continuous tax source have become not only the key work of theoretical research,but also the priority of the local taxation authorities.

However,in recent years,there is a trend of slowdown in local revenue and the source of taxes tends to shrink,which makes it even more difficult to match the growth of GDP.