Fiscal incentives and local tax competition: Evidence from China
Fiscal incentives and local tax competition: Evidence from China
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财政激励和地方税收竞争：来自中国的证据
DOI：
10.1111/twec.12959
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发表时间：
2020
期刊：
影响因子：
2.5
通讯作者：
Yang Chenping
中科院分区：
文献类型：
--
作者：
Liu Yongzheng;Tai Hang;Yang Chenping
本文探讨了中国背景下财政激励措施如何影响地方政府的资本税决策。我们开发了一个模型，在该模型中，地方政府面临不同的财政激励措施，通过企业税来争夺流动资本。 2004-13年中国城市的数据证实了该模型的关键预测是，地方企业所得税分摊比例的提高（代表地方财政激励措施）使城市政府的横向税收反应更强。我们的研究结果为财政联邦主义文献做出了贡献，提供了支持地方政府面临的财政激励措施显着影响其政策选择这一论点的证据。此外，我们还提供了中国各省内部地方税收竞争的明确证据，长期以来，地方税收竞争一直被视为中国经济快速增长的驱动力之一。
This paper explores how fiscal incentives affect capital tax decisions by local governments in the Chinese context. We develop a model in which local governments, facing different fiscal incentives, compete for mobile capital over corporate taxes. The key prediction of the model, borne out in data from Chinese cities over the years 2004-13, is that an increase in the local corporate income tax-sharing ratio, proxying local fiscal incentives, makes city governments’ horizontal tax reactions stronger. Our results contribute to the fiscal federalism literature by providing evidence in support of the argument that fiscal incentives faced by local governments significantly shape their policy choices. Additionally, we provide explicit evidence on local tax competition within provinces in China, which has long been regarded as one of the driving forces of China’s rapid economic growth.