The influence of Rural tax and fee Reform on Grass-roots political Power

In order to fundamentally reduce the burden of farmers, increase their income, maintain the long-term stability of rural society, and promote the all-round development of rural economy, the CPC Central Committee and the State Council decided in March 2000 to carry out the work of changing rural fees into taxes in Anhui province. and require nine major agricultural provinces and regions to select a number of counties and cities for pilot, and then gradually popularize throughout the country. Anhui Province began to carry out the pilot work of rural tax and fee reform in 2000, and a year later, rural tax and fee reform was widely carried out throughout the country. Rural tax and fee reform is regarded as the third major change in China's rural areas since the land reform and after the implementation of household contract management. The rural tax and fee reform has not only reduced the burden of farmers, but also caused some negative effects on the operation of grass-roots political power.

I. the influence of rural tax and fee reform on grass-roots political power

1. Township government finance is in trouble.

Before the abolition of agricultural tax, the township financial revenue was mainly industrial and commercial tax, agricultural tax and township overall planning, coupled with the non-standard system at that time, the government also strengthened the financial revenue through various fees and charges. After the reform of taxes and fees in rural areas, the arbitrary collection of fees, fund-raising and apportionment in rural areas have been effectively stopped, and the burden on farmers has been reduced, but at the same time, the financial income of villages and towns has been greatly reduced, especially for counties and townships with underdeveloped economy and agriculture as the main industry. After abolishing the agricultural tax, which accounts for almost 70% of the total financial revenue of villages and towns, there have been unprecedented difficulties in the operation and management of township finance.

One of the important financial revenues of villages and towns before the tax and fee reform was township overall planning. Five items of "township overall planning" income were cancelled in the tax and fee reform, but the corresponding expenditure items were not cancelled, but the financial burden at the county and township levels was changed. The financial investment in rural compulsory education is mainly "county-based", and the central government supports its development through payment and transfer, the militia training expenditure is arranged by the county-level financial budget, and the family planning and preferential care expenditure is arranged by the township-level financial budget. Rural road construction and maintenance fees are no longer fixed from farmers, and will be resolved by villagers' meetings through democratic consultation. The reduction in fiscal revenue has not led to a reduction in expenditure, which has aggravated the pressure on township-level finance, which originally had insufficient financial resources. Take Guangdong Province as an example, according to the data of the provincial tax reform office, the gap in financial revenue and expenditure of towns and villages after the tax and fee reform is 3.853 billion yuan. in addition to the special funds for provincial financial transfer payments and subsidies for prefecture-level cities, 1.5 billion yuan will be absorbed by the town finance on its own. Most of the towns in the Pearl River Delta are entirely responsible for themselves. In this regard, many town and village cadres are worried and are not optimistic about the future. 159 town cadres (68.5%) thought that the operation of the town government would be more difficult after the reform than before. [1] P11

Our field research is basically consistent with this. Due to the cancellation of township fund-raising income, financial constraints have led to difficulties in the operation of villages and towns. Yangjia Town is an agricultural town in Leizhou City, Guangdong Province, with a backward economy. In 2003, the per capita annual income of farmers was only 1685 yuan. Since the implementation of the rural tax and fee reform in the second half of 2003, the overall planning of the town and village level has been cancelled and the collection standard of agricultural tax has been lowered. The work at the town and village levels has been significantly affected. Before the tax and fee reform, Yangjiazhen coordinated the annual salary of 600000 yuan for rural cadres, 300000 yuan for water conservancy construction, 200000 yuan for highway maintenance, 100000 yuan for excellent soldiers, 100000 yuan for five insurance deposits, and 100000 yuan for office and conference funds. in addition, more than 200,000 yuan of social support for children born to the masses are levied, and the disposable financial resources are about 1.7 million yuan a year, which can basically maintain the normal development of all the work of the town government. After the implementation of the tax reform, the overall planning at the town level was cancelled. The only disposable fund of the town government this year is 200000 yuan for social support for children born to children. In addition, the Leizhou municipal government allocates 4000 yuan per month for office expenses. The town income has greatly shrunk, but the expenditure remains the same. The normal operation of the town government is threatened. Usually, even the office telephone, bus maintenance fuel, daily office, reception, newspaper expenses and so on can not be maintained. Yangjia Town can only scrape by on the 4000 yuan of office funds allocated by Leizhou Municipal Government every month. The monthly office telephone fee of the town government is about 1400 yuan, the canteen subsidy is more than 1000 yuan, and the electricity fee is several hundred yuan. Two cars go to the countryside all the year round, and the fuel cost per car per day is not less than 100yuan. In addition, some other normal office expenses are needed. In order to maintain normal operation, the government had to allow some cadres to lend money in the name of individuals to "provide assistance". The mayor said: "Banks and credit cooperatives do not trust our government for a long time. Interest alone costs NT $80,000 to NT $90,000 a year. As long as there is money in the government account, it will be taken away by the credit union in time. There is really no way to let leading cadres make loans according to levels and quantities." According to the leader of the research office of Leizhou City, the 18 township governments and one street office in the city are all trapped by money, the operation is difficult, it is very common that electricity and telephone bills are not paid, and power outages and phone calls occur from time to time.

2. The debts of villages and towns are heavy, and their solvency is greatly weakened.

Generally speaking, local governments are not allowed to have fiscal deficits and cannot borrow debts, but in fact many local governments have a large number of fiscal deficits due to various reasons. The causes of township debt are varied: there are debts owed by township enterprises for the establishment of township enterprises, debts for building rural infrastructure, debts for improving educational conditions and construction of teaching buildings, and so on, ranging from more than 10 million yuan to as little as more than 1 million yuan. A survey in Guangdong Province shows that there are 184 towns with net debt, accounting for 79.3% of the towns surveyed, 119 of which have a net debt of more than 5 million yuan, accounting for 51.3%, and only 48 towns with no net debt, accounting for only 20.7%. There are 200 villages with net debt, accounting for 78.1% of the villages surveyed, 68 of which have a net debt of more than 100000 yuan, accounting for 26.6% of the villages surveyed, and only 56 villages without net debt, accounting for only 21.9%. [1] P12 after investigation in Leizhou City, Guangdong Province, we also found that this is a common phenomenon. The conditions of Longmen Town are excellent among all villages and towns in Leizhou, but this township with 70,000 people still owes a debt of more than 20 million yuan, and so far only tens of thousands of yuan has been repaid, and the court has seized millions of property. The secretary of the town party committee said that although the town party secretary was heavily in debt, the original office building had already become a dangerous building and was seized, so he gritted his teeth and looked everywhere for money to build a new office building. The new office building was built only two months ago, spent a total of more than 1.3 million, and now owes 400000, all of which is for us to come. Now it's the end of the year, and I'm sad at this time of year. Creditors will come to collect debts all the year round, and when they make a lot of trouble at the end of the year, we town leaders will avoid debts everywhere, dare not go home or return to their units, and constantly change their phone numbers to let only the people in the office know, as if it were a private debt. They have been intimidated by triads almost every year, and their families have been worried about it for a long time. Over the past few years, contractors have blocked the town's family planning office building with mud, and it's not easy to think about them, but we really don't have the money to pay it back, so we have to let them sue in court. As soon as we sue, we lose. The court has shut down our accounts many times. Actually, our accounts have no money all the year round. At present, Yangjia Town in Leizhou City owes more than 7 million yuan in various debts, including more than 3 million yuan for road construction, 1.5 million yuan for Yang's red brick factory, more than 800,000 yuan for school construction, and more than 600,000 yuan for office loans. Now that the overall planning at the town level has been cancelled, the town government is no longer able to repay, and the debt burden is heavy. In order to maintain normal operation, the town government had to continue to borrow and accumulate more and more debt. Yingli Town, which has better economic conditions, also owes millions of yuan. Most towns with poor economic conditions have debts of more than 30 million yuan, and cadres generally report that there is no solution in a short period of time.

Township debt is formed by rolling accumulation over the years, the local economic development is slow, Leizhou township leaders are basically borrowing to maintain the normal operation of the government. After the rural tax and fee reform, the grass-roots government has its own financial resources, and the transfer payment is not enough to fully make up for the reduction in income, which makes it difficult for the township government to repay the old debt, add the new debt, and get into a dilemma. Many grass-roots cadres said they were not optimistic about solving township debts. In a survey in Guangdong Province, 160 township cadres (79.6%) thought that the town was unable to resolve debts after the reform, that is to say, 80% of people thought that township debts were difficult to solve.

3. The financial predicament after the tax and fee reform has reduced the ability of township governments to supply public goods to a certain extent.

The so-called rural public goods refers to the public welfare goods or services provided by farmers, rural areas and agricultural production in rural areas. It mainly includes rural infrastructure, rural compulsory education, family planning, social security services and so on. Since the founding of the people's Republic of China, China has implemented a city-centered development strategy. Basic education, infrastructure, health care and other public goods enjoyed by urban residents are arranged by the financial budget, while the shortage of rural public goods is solved by farmers themselves. It is mainly solved through the state policy-- the "three proposals and five unification" system, which authorizes the township government to solve the expenses needed by the five public utilities in their administrative areas, such as family planning, compulsory education, preferential care, and militia training, in the whole township. After the reform of taxes and fees in rural areas, the financial revenue of many villages and towns has decreased sharply, although there are state financial transfer payments, but this can not solve the financial gap of villages and towns. In fact, in addition to the coastal economically developed areas have certain financial resources to support the supply of rural public goods after the tax and fee reform, other local villages and towns because of economic backwardness, it is difficult to provide necessary public goods for farmers and rural areas.

Take Leizhou City, Guangdong Province as an example, due to the cancellation of town-level overall planning, the township government no longer has the financial resources to solve some practical difficulties for the masses. According to the mayor of Yangjia Town, in the past, the government invested more than 600,000 yuan every year in rural water conservancy, road construction and maintenance, and solving the various difficulties of the masses, but now public welfare undertakings such as roads and water conservancy have to raise funds through discussion and discussion. however, these projects are often tens of thousands or hundreds of thousands, and the collection of fees from farmers after the tax and fee reform can only be discussed one by one, and each person cannot exceed 15 yuan per year, which basically cannot solve the problem of funds. After a survey of the Leizhou City CPPCC, it is found that due to the lack of perfection and standardization in the implementation process, it is often unable to collect or receive it, and even if it is collected, it will not be able to solve the funds needed for large projects. Many water conservancy facilities and roads are often invested in tens of millions of dollars, if not built, there are serious hidden dangers, endangering the lives and property of farmers. For example, the Nanhai Embankment, the Leigao seawall and the Jijia Pei Tsai seawall are not under the charge of the water conservancy department, and they do not allocate funds, but rely on the town and village for long-term construction and maintenance. In the past, when sand and mud dikes were built, the typhoon tide collapsed, directly damaging 100000 mu of farmland and shrimp ponds and damaging more than 80, 000 farmers. If you want to build a concrete slope protection seawall to resist typhoon tides, each project will cost more than 10 million yuan. The leader of Longmen Town said that the supporting projects of Longmen Town dare not be launched, and we have to find money. Longmen Town recently carried out projects, but only after the money to start the construction. Family planning and funeral reform work here have been yellow cards, and these two tasks have been "vetoed by one vote" to the top leader, so the town has to find ways to find funds to do it. The funding for the first six years of family planning work was zero, and this year, the superiors promised to give 18000, but so far I haven't seen a penny. The only way to provide some services to farmers is to borrow money.

II. Ways to solve the problem of political power at the grass-roots level

1. Reform the financial system of villages and towns and increase the intensity of transfer payment.

The tax-sharing system in 1994 increased the financial resources of local governments below the provincial level, increased the concentration of central finance, and enhanced the macro-control ability of the central government. However, it also has two negative effects, one is the reduction of local financial capacity, and the other is the serious asymmetry between local government financial power and administrative power. The township finance is in a dilemma after the rural tax and fee reform. In order to ensure the smooth and smooth progress of the rural tax and fee reform, the two negative effects of the tax-sharing system must be eliminated.

The first is to open up new tax sources, redistribute the original tax sources, and improve the self-security ability of township finance. Since the reform of rural taxes and fees, there have been difficulties in the finance of Xu villages and towns in China, and many villages and towns have even had huge financial deficits and debts. one of the very important reasons is that some rural villages and towns have single financial resources and poor self-security ability. In these areas, the rural economic foundation is weak, the degree of marketization is not high, there are neither high value-added, high tax and profit agricultural production and processing enterprises, nor other industries, agricultural tax and fee income has become the pillar of these township finance. Agricultural tax relief will inevitably impact local finance, resulting in financial revenue in a dilemma. Therefore, the most fundamental way for township finance to get rid of the predicament after the rural tax and fee reform is to vigorously develop the local economy, to be based on local advantages and resource advantages, to be market-oriented, to adjust and optimize the rural industrial structure, and to speed up the process of agricultural industrialization and modernization. to provide stable financial resources for finance.

In order to solve the local financial crisis, in addition to the transfer payment of the central and provincial governments, an important aspect is to redistribute tax sources to provide a more stable source of township finance. Because after the implementation of the tax-sharing system, the state also turns over most of the revenue from business tax and personal income tax to the provincial and central finance, it can be said that the reform of the tax-sharing system only considers how to increase the financial revenue of the central government, but does not consider how to set up the main types of taxes that meet the requirements of local taxes, and places the main sources of township finance on industrial and commercial tax and agricultural tax, resulting in the crisis of township financial system. After the reform of taxes and fees in rural areas, can the state give villages and towns a larger share of tax distribution, and at the same time open up some new taxes in villages and towns? for example, the real estate tax with a relatively solid tax base and the evolution of resource taxes in areas rich in natural resources to the main tax types, so that township finance has become a real first-level local finance.

The second is to increase the intensity of transfer payment to ensure the relative balance between financial power and administrative power of local governments. According to Article 59 and 61 of the Organic Law of the people's Republic of China on Local people's Congresses and Local people's governments at all levels, local people's governments at or above the county level exercise the following functions and powers: … (5) to implement plans and budgets for national economic and social development, to manage the economic, educational, scientific, cultural, public health, sports, environmental and resource protection, urban and rural construction and finance, civil affairs, public security, ethnic affairs, judicial administration, supervision, family planning and other administrative work within their respective administrative areas;... The people's governments of townships, nationality townships and towns exercise the following functions and powers: … (2) to implement the plans and budgets for economic and social development within their respective administrative areas, and to manage the economic, educational, scientific, cultural, public health, sports, finance, civil affairs, public security, judicial administration, family planning and other administrative work within their respective administrative areas;... In other words, the functions of county and township governments basically include all aspects of rural social life. Some of these functions can not be accomplished by the grass-roots government, such as rural compulsory education, agricultural science and technology investment and so on. From the perspective of government governance, it is a pure public product covering the whole country. From a legal point of view, it is a national obligation, not an obligation of the grass-roots government. For these matters, the state should further adjust the structure of fiscal expenditure and increase the proportion of expenditure on public goods and services in accordance with the principles of public finance. Take compulsory education as an example, the common practice in all countries is that the state treats all school-age children without discrimination, so that everyone can distribute educational resources fairly and without discrimination and use existing educational facilities. In China, rural compulsory education before the tax and fee reform has become one of the most important responsibilities of local grass-roots governments, which is obviously inconsistent with the practices of countries all over the world. After the reform of taxes and fees, we have established a "county-based" financial input system, which mainly emphasizes the realization of rural children's right to compulsory education through transfer payment, which is the relative balance between financial power and administrative power. If the state wants to ensure the realization of other functions of the grass-roots government, it should give it financial power, because to some extent, the function means financial power, and only the relative balance between financial power and administrative power can make the grass-roots political power operate normally. In order to avoid the three chaos and other incidents that hurt farmers from happening again.

The last part is to reform the management mode of township finance. At present, the finance of many villages and towns is quite difficult, which is accompanied by a chaotic financial management system. Villages and towns due to the lack of necessary financial supervision mechanism, expenditure is also lack of budget constraints, so the use of financial funds is very arbitrary, which is also an important reason for the financial predicament at the grass-roots level. At present, three system models can be explored for the management of township finance: (1) a relatively standardized township public financial system. This model is mainly implemented in villages and towns where the economy is relatively developed, the scale of fiscal revenue is large, and the financial growth can meet the needs of their own expenditure. (2) the financial system of villages and towns based on the tax-sharing system. This model is mainly implemented in villages and towns where the economic situation is good, the finance has a certain scale and the balance between revenue and expenditure is small. (3) the financial system of township, financial and county escrow. For the villages and towns with underdeveloped economy and small financial revenue, we can compare with the management method of centralized receipt and payment of the national treasury, their financial revenue is directly handed over to the county treasury, and the financial expenditure is arranged by the county finance as a whole, so as to ensure their reasonable expenditure needs. to avoid the phenomenon that villages and towns directly reach out to farmers to meet the needs of expenditure. With regard to the financial management of most counties and townships, we should, in accordance with the spirit of the central government, actively promote the reform of "direct management of counties by provinces" and "county management by townships and townships".

2. Deepen the reform of township institutions.

With the promotion of tax and fee reform, the reform of township institutions has become another focus of China's rural reform. Scholars have different views on the reform of township institutions. Some scholars believe that the township government should be abolished and the township government should be turned into the dispatched agency of the county-level government, while others believe that township autonomy should be implemented. No matter what the direction of the reform is, there is one problem that must be faced, that is, the current situation of overcrowded township institutions. Before the tax and fee reform, there were about 48000 township governments in China, with about 200 murmur300 workers of all kinds. According to incomplete statistics, there are about 13.162 million people who need farmers to support at the township level, with an average of one cadre for every 68 farmers. The bloated organization has caused about 40 per cent additional burden on farmers. Therefore, in order to consolidate the achievements of tax and fee reform, we must promote the reform of township institutions.

The first is to withdraw and merge the original villages and towns and reform the township institutions. The scale of the original township is too small, and the financial support staff is not reduced because the township scale is too small, it can be said that although the sparrow is small, the five internal organs are complete. The result of too many personnel will inevitably lead to the increase of national administrative costs. Under the original system, in order to solve the cost problem, we can only collect fees, raise funds and apportion them indiscriminately in various names. It is a good choice to reduce the cost of national administrative management, put an end to the three chaos, protect the interests of farmers, merge villages and towns, and reform township institutions. Merge too many scattered public institutions and encourage town-level institutions with mature conditions to become enterprises and enter the market.

The second is to clarify the functions of township government and change the way of governance. In accordance with Article 61 of the Organic Law of the people's Republic of China on Local people's Congresses and Local people's governments at various levels, the people's governments of townships, nationality townships and towns exercise the following functions and powers: (2) to implement plans and budgets for economic and social development within their respective administrative areas To manage the administrative work of economy, education, science, culture, health, sports, finance, civil affairs, public security, judicial administration, family planning and so on in this administrative area. In other words, the functions of township government cover all aspects of rural life. But in fact, the township government is unable to achieve the above functions. In order to achieve these aspects, an important condition is to greatly increase the number of staff, which should return to the old path of township development before the tax and fee reform. In this regard, we should clarify the functions of township governments, mainly to assist the central government in providing some rural public goods, or if these public goods are provided directly by the central government, the cost is relatively high. it includes public security, local transportation, information, family planning and so on. Areas such as compulsory education, rural medical insurance and investment in agricultural science and technology are provided by the central government. For example, in the rural compulsory education before the tax reform, due to the less investment from the central government, the investment system of rural compulsory education is basically township-based, and the addition of rural education fees and education fund-raising have become the two major sources of education funds. In order to maintain the normal operation of education, grass-roots departments have to constantly charge farmers to run schools. The funding for compulsory education is basically provided by the central government all over the world. It emphasizes that as long as they are qualified subjects, their rights are equal and undifferentiated, no one has the privilege above the law, and no one can have a superior position to others. At the same time, countries around the world also pass legislation to provide a certain degree of school education for certain children free of charge. As stipulated in article 34 of the Italian Constitution (1947), "Schools are open to all. Primary education for those who have reached the age of 8 is compulsory and free of charge". Article 145 of the Constitution of the German Empire (Weimar Constitution) stipulates that "primary education shall be a general obligation of the people. The duration of schooling shall be at least eight school years, followed by the completion of the school until the completion of the school until the age of 18. The teaching and educational supplies of the national primary school and the completed school are completely free of charge". From this, it can be seen that the development of rural compulsory education is neither a function of the grass-roots government, nor does it have this ability, and these aspects are often the things that farmers pay most attention to. A survey conducted by the investigation team of rural tax and fee reform in Guangdong Province shows that farmers' expectations of government functions after the rural tax and fee reform are as follows: 62.1% of farmers want the government to do a good job in rural cooperative medical care and reduce farmers' medical expenses; 25.3% of farmers want the government to strictly supervise education fees and reduce farmers' expenditure on education; 12.6% of farmers want to increase investment in rural infrastructure and improve rural living and production conditions. In terms of health care, education and other aspects, China's legislative policies are defined as local government functions, the central government investment is relatively small, now is the time to change.

After clarifying the functions of the government, it is also necessary to change the traditional way of governance and promote institutional reform. After the founding of the people's Republic of China, under the influence of the administrative law of the former Soviet Union, our country carried out the "management" mode opposite to the western countries. State organs enjoy a wide range of management powers, and the scope of power intervention covers all economic and social fields. It is precisely because of the traditional omnipotent governance model that grass-roots government organs and personnel are increasing day by day, which increases the cost of government governance. So we need to change this omnipotence and establish a service-oriented government. Township governments are more likely to serve farmers by improving the investment environment, introducing capital, technology, and talents, providing information for farmers, and improving social security, rather than directly intervening in economic development, charging and collecting taxes.