ABSTRACT
This chapter describes a short look at the actual situation about development after the 1980s. It considers advantages and disadvantages of a financial contract system in the 1980s, and backgrounds of implementation of tax sharing system. The chapter explores the purpose of tax sharing system, and the details and institutional frameworks of tax sharing system. It analyzes the problems on current tax sharing system on asymmetry problem of financial authority and public service obligation of lower rank local government than provincial level, without norm problem and regional disparity problem in financial transfer pattern led by administration power and incomplete tax collection authority problem of local government. The chapter investigates the problems in the relations among governments and social effects from viewpoints of tax sharing system. It impacts of establishing private property system for constitutional government in China based upon general characteristics of a local autonomy system.
