Expenditure caused by the public department transferring part of the ownership of funds to others for free. For example, the payment of old-age insurance, unemployment benefits and subsidies for retired soldiers. Comparison of transfer payments in economic work: fees paid by the government or enterprises to individuals or lower-level governments for increasing their income and purchasing power. The expenditure of the government or enterprises to obtain goods or services for free is a form of income redistribution. Transfer payment includes government transfer payment, enterprise transfer payment and intergovernmental transfer payment. ① Government transfer payment. Most of them are welfare expenditures, such as social insurance benefits, pensions, pensions, unemployment benefits, relief funds and various subsidies; Agricultural product price subsidies are also government transfer payments. Because the government's transfer payment actually returns the state's fiscal revenue to individuals, some western economists call it negative tax. ② Enterprise transfer payment. Usually refers to the enterprise's appropriation or donation to non-profit organizations, as well as personal injury compensation to non-enterprise employees and so on. Transfer payment objectively narrows the income gap and plays a positive role in maintaining the stability of total demand, reducing the amplitude and intensity of total demand swing and stabilizing social economy. Usually when the depression comes, the total income drops and unemployment increases, and the social welfare expenditure allocated by the government will inevitably increase. This can enhance purchasing power, raise the level of effective demand, and restrain or alleviate depression. When there is excessive demand in the economy, the government can reduce the transfer payment, which can restrain the increase of the total demand level. Of course, for the over-inflated demand, this inhibitory effect is minimal. ③ Intergovernmental transfer payment. Generally, it is a subsidy from the higher level government to the lower level government. The amount of transfer payment is generally calculated according to some socio-economic indicators, such as population and area, as well as the unified unit expenditure standards for some socio-economic activities undertaken by the government, such as education and public security. Inter-governmental transfer payment is mainly to balance the government income gap caused by different geographical environments or different levels of economic development in different regions, so as to ensure that local governments can effectively provide services to the society in accordance with national unified standards. There are three main modes of transfer payment, one is top-down vertical transfer, the other is horizontal transfer, and the third is vertical and horizontal mixed transfer. The principles of regulating the transfer payment system are fairness, efficiency and rule of law. 1994 before the tax-sharing reform, China did a lot of financial transfer payments, and the concept of transfer payment was introduced from western languages after the tax-sharing reform. China's central finance officially implemented the transitional transfer payment method from 1995. According to the expenditure analysis framework in the International Monetary Fund's Handbook of Government Finance Statistics, there are two levels of government transfer payment. One is international transfer payment, including donation, provision of goods and services, and payment of membership fees to multinational organizations; Second, domestic transfer payments, including government transfer payments to families, such as pension and housing subsidies, government subsidies to state-owned enterprises, and intergovernmental financial funds transfer payments. Generally speaking, what we call fiscal transfer payment refers to the transfer payment of fiscal funds between governments, which is an important part of central government expenditure and an important budget income of local governments. In western countries, the important classification of fiscal expenditure is divided into purchase expenditure and transfer expenditure. China's financial transfer payment system is established on the basis of 1994 tax sharing system, which is a set of transfer payment system with China characteristics, and consists of three parts: tax refund, financial transfer payment and special transfer payment. (1) Tax refund is the main form of fiscal transfer payment in China and an important source of local fiscal revenue. Therefore, whether the design of tax refund is reasonable or not determines the rationality of the whole system. However, China's tax rebate is still distributed by the cardinal number method of safeguarding local vested interests, which embodies the principle of leaning to areas with strong income ability, safeguards the vested interests of richer areas, and runs counter to the main purpose of narrowing the regional gap. Moreover, although the tax rebate is nominally the central fiscal revenue, in fact, the local finance has the final decision on this part of the funds. (2) Financial Transfer Payment Financial transfer payment is a subsidy expenditure arranged by the central government to make up for the financial gap in areas with weak financial resources. Financial transfer payment is an important means to narrow the financial gap between regions and should be the main content of financial transfer payment. It mainly includes: general transfer payment, wage adjustment transfer payment, transfer payment in ethnic areas, rural tax and fee reform transfer payment, year-end settlement financial subsidies and other forms. (III) Special Transfer Payment Special transfer payment is a subsidy fund set up by the central government to achieve specific macro policies and strategic objectives of career development, which is mainly used for various public services related to people's livelihood. Local finance needs to use funds according to the prescribed purposes. At present, China's transfer payment system is not very standardized. The main constraints are: first, the powers and responsibilities of governments at all levels have not been clearly defined, and the division of fiscal expenditure is closely related to the powers and responsibilities, so it is difficult to determine the standard concept of revenue and expenditure; Second, China's central finance is still very difficult, which makes the transfer payment system lack sufficient financial support; Third, the adjustment of vested interests is too strong and difficult; Fourth, due to factors such as system, economic structure, natural environment and population status, there are great differences in economic development level and development ability among regions, and it is difficult to achieve regional balance through transfer payment in a short time; Fifth, it is very difficult to count and collect basic data.