Abstract: Based on the panel data of prefecture level cities from 2010 to 2018, this paper tests and analyzes the impact of tax sharing on the supply of local education, health care and transportation public services. The results show that the increase of tax sharing ratio has an incentive effect on the supply of local transportation public services, but has a negative impact on the supply of education and medical public services. Through the heterogeneity analysis, it is found that the impact of tax sharing on the supply of the three public services is different in the north and south regions, as well as in regions with different marketization levels and financial pressures. Further analysis shows that the implementation of the reform of removing counties into districts will help to improve the incentive of tax sharing on the supply of local public medical services.
