What are the problems of fiscal function in China and what are the phenomena?

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1. two theories of financial functions

Talking about financial functions, first of all, should distinguish between the financial functions and the scope of responsibility of the financial sector two different concepts. The Ministry of Finance, as a functional department of the State Council, its scope of responsibility, simply he said is to organize revenue to meet the needs of the national public **** expenditure and economic construction expenditure. Of course, in this process to play a regulatory and supervisory role. As for the financial function, it is an economic term, is a high degree of abstraction of the scope of duties of the financial sector. From the content point of view, the fiscal function at present there are mainly two kinds:

One is the scope of our present fiscal function, which was formed under the planned economic system. Under the conditions of the planned economy, the government sector is the main body of social resource allocation, finance is the main body of the distribution of the state. According to this way of thinking, the state finances are bound to dominate the allocation of social resources. The whole society is like a big factory, and every link of the whole process of social reproduction operates under the control of a unified financial plan. Enterprise finance has become the foundation of the national financial links, family finance is in a subordinate position, the financial resources are very limited, the function is very weak, the formation of the financial functions of a wide range of financial functions are also extended to include production. Investment and consumption of all kinds of financial functions, covering the functions of many sectors, including the government, enterprises, families, so we will call this kind of finance "production and construction of finance".

The other is the financial function under the condition of market economy. In a market economy, the market is the dominant force in the allocation of social resources. Only in the field of market failure, the government departments of the intermediary talent is necessary. State financial functions in the allocation of social resources can only play a supporting role, the primary solution should be through the market can not be solved or through the market can not effectively solve the matter. Specifically include:

(1) provide public **** products. Public **** product is relative to private products, it has three basic characteristics, namely, the utility of the indivisibility, consumption of non-exclusivity, the benefit of the unstoppable, these characteristics determine the market in the provision of public **** product is dysfunctional, and thus also determines the state finance will provide public **** product into the scope of the functions of the inevitability.

(2) Correcting externalities. The so-called external effect is the inconsistency between private costs and social costs or between private benefits and social benefits. That is to say, the behavioral activities of a person or enterprise affects other people or enterprises without bearing the due costs for it, or without corresponding compensation. The existence of these externalities determines that the market supply of products with externalities can only be too much or too little, thus leading to a distorted allocation of social resources. It is therefore the responsibility of the government to correct the externalities by non-market means, including finance.

(3) Maintaining effective competition. Imperfect competition is everywhere in the market economy. The meaning of imperfect competition is that certain industries may be controlled by a small number of enterprises due to the characteristics of the larger scale of operation and the better economic efficiency, i.e., the declining marginal cost, thus generating monopoly power. Monopoly is bound to exclude competition and even lead to the disintegration of the entire competitive market, and the role of the market in allocating resources will thus become dysfunctional. This determines that the government should assume the responsibility of maintaining effective market competition, and include the tasks related to this in the scope of financial responsibilities.

(4) Regulation of income distribution. Under the action of the market mechanism, the distribution of income is out of the labor force provided by each person, the amount of capital, land and other factors of production, as well as the price that can be obtained in the market to determine, due to the different circumstances of people's possession or inheritance of property, as well as differences in the ability to work, the distribution of income determined by the market is usually very unfair situation. This not only violates the law of social justice, but also inevitably leads to polarization, social conflicts, and denies the low-income classes the opportunity to develop and improve their situation. Therefore, the government is obliged to use financial means to regulate the unfair distribution of income.

(5) Stabilize the economy. Laissez-faire market economy can not be self-smooth forward development, the reason is due to price signals in some important market is difficult to stretch freely, flexible regulation; Second, from the perspective of the total supply and demand, different subjects in the realization of their economic interests in the competitive and exclusionary, but also will make the market's spontaneous forces can not always ensure that the total supply and demand in the full use of social resources at the level of consistency. Inflation, unemployment, trade imbalances, and fluctuations in economic growth can recur periodically, so it is also necessary for the government to use fiscal means to intervene in the operation of the economy.

To sum up, the scope of the fiscal function under the market economy is to "market failure" as the standard, from correcting and overcoming the phenomenon of "market failure" to define the scope of the fiscal function and the planned economy under the conditions of the fiscal function. Compared with the scope of financial functions under the conditions of a planned economy, it is small and narrow, so people often refer to the state finances under the conditions of a market economy as "public **** finances".

2. China's traditional financial functions there are some problems that are not compatible with the market economic system. With China's market-oriented economic system reform continues to promote, the traditional scope of financial functions and the new market economy is bound to produce contradictions between the operating mechanism. Fiscal function is too wide usually easy to produce the following problems:

(1) not conducive to the formation of market economic operation mechanism. The state based on the ownership of the means of production to assume the financial functions of state-owned enterprises, on the one hand, the owner of the function and financial functions of the confusion, resulting in the separation of government and enterprises, but also not conducive to the formation of self-restraint mechanism of enterprises, and thus affect the pace of reform of state-owned enterprises.

(2) Increase the financial burden of the state, making it difficult to get rid of the national financial difficulties. In recent years in the country's fiscal revenue is growing rapidly, but the government's financial functions have not been adjusted accordingly, not only did not give up the responsibility of providing operating funds to enterprises, but also still through the appropriation. Repayment of loans with taxes. Make up for losses and other channels to supply funds to enterprises, resulting in high expenditures. The result is bound to be the government debt, huge deficits, financial difficulties out of the predicament.

(3) led to the existing many financial functions of the "offside" and "lack of". Financial functions are dismembered or weakened, the scope of financial functions "offside", should not be involved in things involved in or even involved in too much, at the same time will inevitably result in the scope of the financial functions of the "lack of", so that the financial aspects of the financial should make a difference, but do not do a good job or simply do not Do. At present, China's financial one hand, there is a serious problem of inadequate protection, such as some counties can not even pay wages on schedule, agricultural science and technology education. Insufficient investment in public **** facilities. On the other hand, there is also the problem of excessive protection. Such as the range of all-inclusive institutions is too large, the burden of financial subsidies is too heavy, public medical care to eat a big pot of rice and so on. The main contradiction at present is the latter aspect, that is, still following the financial system of supply-type finance, the big package. In this regard, it is necessary to intensify the reform efforts and accelerate the pace of transformation to a financial system in line with the market economy. From this point of view, the adjustment of the existing scope of financial functions, is the socialist market economy under the conditions of financial reform necessary initiatives.