An Empirical Study Of The Distribution Of The National Economy Of Land Revenue

Land is the most fundamental resource that human live on as well as the key factor thatinfluences economic development. According to the principle of distribution by factor, the benefitof land is based on the lease issued by the economic subject who owns the right to benefit fromland. Meanwhile, the government conduct regulation by redistribution. The distribution ofearnings embodies the benefit from land, which enhances its role as the core of land institution.Consequently, the land earnings distribution exerts a significant and profound influence towardsthe entire domestic economy.At the current position of institute, there are five main subjects participating the land earningsdistribution. Local governments enjoy the most benefit from it and the volume of income from theland granting and tax keeps increasing; farmers and citizens are compensated for the requisitionand demolition of land and the up going scale of the compensation begins to share the gains of thegovernment, which brings out a specific group that live on this kind of compensation; the realestate developers take great advantage of the process of urbanization to accumulate vast amount ofwealth, which is the result of the high profit rate coming from the enormous added value of land;the private proprietors also get benefit with the form of lease and added value while this kind ofearnings is not originated from free development of cities; financial institutes also gains a lot byfinancing the local government, real estate developers, and supplying the mortgage to individuals.At present, the land distribution system is the textbook of the traditional developing patternthat is based on the physical substance. This kind of irrational system has a strong impact onnational economy.Firstly, it stimulates the extensive industrialization and fictitious urbanization, whichconcentrates almost completely on the construction of the city regardless of the urbanization ofresidents and social security, ignoring the process to help the peasant to transfer to rural citizens,which leads to growth instead of development.Secondly, the cost of urbanization based on land based fiscal system keeps increasing andcannot be sustainable. The growth of granting land expenditure compresses the revenue of localgovernment and the compensation brings up a new class who particularly live on the benefit ofland. At the same time, land requisition causes serious issue of corruption followed by the fiercesocial contradictory, increasing the cost to maintain social stability.Thirdly, as income from property, land earnings accounts for too much among the entiredomestic income, restraining the income from the labor and human capital as well as domesticconsuming demand. Meanwhile, this kind of fiscal system doesn’t respect the principle of fairness and effectiveness, decreases the liquidity of social capital, which causes the unemployment ofcapital as well as the low use ratio. In addition, dependence on the substance capital and abnormalsaving-consuming structure are also enhanced. Finally, the social wealth flows too much to theparticular group which will lead to greater and greater gap between the rich and the poor.Fourthly, large scale of financing to local governments, developers and individuals hollowsthe real economy. The characteristic of real estate as financial asset together with easy monetarypolicy strengthens the price bubble, which means a higher price, putting the fiscal system at greatrisk.Fifthly, the absence or malposition of land owners make the ownership impracticable. Stateowned property is different from that of government, in the process to distribute the land earnings,the ownership of the state owned land is not realized as it should have, instead, a large amount oflease is taken by the government and individuals, which leads to substantial loss of state ownedproperty. Due to the subsidiary, it is common that our companies are not able to rely on themselves,what they live on is the benefit of land.The way to transfer the developing pattern is to push the revolution of the land earningsdistribution system. Firstly, the predominant thought of fairness and effectiveness must beestablished, that is to say, distribution by factors should be respected and the key influence ofhuman capital should be emphasized. Simultaneously, Chinese characteristics social securitysystem should be set to maintain the justice. The income from property should be standardized,and that from laboring and human capital should be encouraged in order to accelerate the formingand accumulating of the human capital then realize the transition and upgrading of the China’seconomy. Secondly, the controlling toward usage of land and regulatory of earnings should beinsisted, bicameral system of land should be broken down in order to prevent land fromprivatization. Thirdly, the usage of state owned land should be compensated as form of annuallease, at the mean time, the added value of social contribution should be possessed by the nationand the tax system should be streamlined. Fourthly, the relationship linked to property anddecision between central and local government should be revised, which aims at breaking downthe dependency on the land based fiscal system. The revolution should emphasize on thereplacement by property tax of land based fiscal. Fifthly, the urbanization of rural residents can bepushed by the process of exchange between land and social security.