The Regression Analysis of Tax Competition among Local Governments

Although the local government in China is still a lack of an independent tax right,the political decentralization makes local interests increasingly prominent,which contributes to the interests pattern of tax competition among local governments in our country.The implementation of the tax-sharing system may promote the local governments to expand virtual tax competition.This paper attempts to explore the nature and extent of the tax competition among local governments in China,using measurement regression with Chinese provincial panel data from the year 2005-2010 based on the spatial econometric model,and make some empirical analysis.The main findings in research are as follows:Different provinces of fiscal revenue show indistinctive spatial characters,while various provinces of VAT,business tax,personal income tax,business income tax show significantly strategy complementary characteristics over the same period of time.We conduct some in-depth discussion and analysis of these findings combining with the actual situation in China.