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.