Abstract: As a kind of public governance activities of a country, finance serves to maintain public interests ultimately. Setting up a framework of modern public governance to promote the modern financial system to meet the requirements of realizing the accountability, openness and transparency, predictability and public engagement is an important breakthrough in the future fiscal and taxation reform. In order to achieve finance ruled by law, it is necessary to have it guaranteed from the two aspects of law and institution. A real modern financial system should be accompanied with sound law, perfect system, scientific contents and efficient management. In the future, we can draw lessons from the reform experiences of the progressive era in United States, go on to strengthen the budget transparency unceasingly, build a budget performance evaluation mechanism, establish a tax system mainly based on direct taxes to promote tax equitableness,?introduce public participation and the administrative hearing system in public policy-making, and optimize the demand expression mechanism.

Key words: modern financial system; public governance; finance ruled by law; fiscal and tax reform; public engagement