This study explores the influence of the 1994 tax reform on intraprovincial inequality in financing basic education. The empirical analysis finds that the reform has decreased inequality in general, suggesting that the center may attain its policy goal through centralizing its relative fiscal capability and increasing the intergovernmental transfers. The data defy that there is a linear relationship between the fiscal dependency of the province on the center and educational inequality, even though the reform has changed the fiscal dependency of each province significantly. But the study strongly supports that there is a U-shaped relationship between fiscal dependency and inequality. This indicates that when fiscal dependency increases, education in a richer province will be more equal, whereas that in a poorer province will be more unequal. (Contains 2 figures, 2 tables and 1 note.) [This article was translated by Ted Wang.]