What Is Fiscal Federalism?

Fiscal federalism, also known as fiscal federalism, is a standardized system for dealing with fiscal relations. It means that governments at all levels have certain independence and autonomy in fiscal functions and revenues in order to perform public economic functions together. The content includes a series of issues such as the role of different levels of government, how to divide revenues and expenditures between levels of government, and intergovernmental subsidies, which is actually the theory of fiscal decentralization. The core is to deal with the financial relationship between the central and local governments, that is, the centralization and decentralization of the central and local governments in the fiscal casserole.

Fiscal federalism

Right!

Fiscal federalism, also known as fiscal federalism, is a standardized system for dealing with fiscal relations. It means that governments at all levels have certain independence and autonomy in fiscal functions and revenues in order to perform public economic functions together. The content includes a series of issues such as the role of different levels of government, how to divide revenues and expenditures between levels of government, and intergovernmental subsidies, which is actually the theory of fiscal decentralization. The core is to deal with the financial relationship between the central and local governments, that is, the centralization and decentralization of the central and local governments in the fiscal casserole.

The traditional theory of fiscal federalism is a theory about the rational distribution of public sector functions and the rational distribution of financial resources between different levels of government. Since the 1980s, new perspectives have appeared in all aspects of the basic theory of fiscal federalism, and its analytical methods have also tended to develop toward political economics analysis and public sector institutional analysis. The development of fiscal federalism in transition economies and developing countries, and new theoretical issues such as fiscal federalism and regional economic integration.

As a new institutional arrangement, the tax-sharing fiscal system introduced in China in 1994 has obvious transitional characteristics. At the same time, it still has some problems while achieving positive results in operation. In view of these problems, we can reform and improve from the aspects of reasonably defining the power of affairs and financial rights between governments at all levels, establishing a standardized financial transfer payment system, and improving the sub-provincial tax sharing system.