Research On Personal Property Taxation System

Property tax reform has become a hot topic since the central government made the intention to levy property tax on personal housing clear in 2003.Property tax reform is the most controversial issue and faced with greatest hampers in the process of improving local taxation system and taxation structure reform,controversy still exists even though property tax is in legislative procedure.Paying attention to tax burden,the core issue of the formulation of property tax,is of great practical value for responding skeptical voices,eliminating scruples and pushing forward property tax reform.In recent years,the Chinese government has been advancing referential tax policies and is implementing more analogous polices to reduce negative impacts of COVID-19.With local finances are already stretched,breaking through the difficulties and blockages of property tax is of great practical significance for improving local taxation system,local fiscal revenue system and expenditure system,laying a solid foundation for reshaping central-local fiscal relations,so as to enhance the basic position of local finance in the modernization of national governance system and governance capacity.First,this paper starts from analyzing theories of personal housing property tax burden and taxation system,which is the logical and theoretical basis of this paper.Generally speaking,tax burden is a result of tax already levied according to the taxation system.But on the other hand,tax burden is the essential question of taxation system when imposing a new tax,so it is with personal housing property tax,which involves direct burden of family,local economic development and interests of local government.This part defines concepts of property tax,personal housing property tax and personal housing property tax burden,and then analyzes the relationship among them,on this basis,the target of this paper is clearly defined.After that,this paper analyzes factors that affect personal housing property tax burden,including resident’s income and wealth,design of taxation system,welfare expenditure on local residents,etc.Besides,this part proposes a measurement of personal housing property tax burden,including general and comprehensive measure index.Finally,on the basis of determining concepts of property tax burden,factors and measurement,this paper analyzes the relationship of personal housing property tax burden and the design of taxation system,that is,property tax burden is the core of the design of taxation system,which involves residents’ ability of paying,financing capacity of local government,development of real estate market and readjustment of income and wealth distribution.Based on theory analysis,this paper analyzes institutional evolution and situation of property tax burden since the foundation of the People’s Republic of China.Since then,development of property tax has experienced two phases,initial stage from1950 to 1985 and improvement stage from 1986 to date.In the initial stage,scope of property taxation was narrow,covered only a few regions that approved by central government,and the government did not levy tax on non-operational real estate.In the stage of improvement,although the taxation of non-operating real estate owned by residents was involved,a large number of houses were not in the list and only detahed houses in Chongqing was levied,moreover,reform in Shanghai did not involve existing houses.After more than 30 years of development,property tax is not implemented in essence,which to some extent leads to real estate market bubble,land finance and a series of problems.Based on arranging for history of property tax,this paper analyzes the situation of property tax burden at present.By analyzing property tax burden in Shanghai and Chongqing,we are able to find problems of property tax at present and reasons why the functions of property tax has not been fully utilized,this can provide lessons for the design of relevant taxation system and help to avoid recurrence of similar problems.At the same time,it is the problems that current property tax polices and tax burden in pilot cities reflect that manifest the necessity of property tax reforms.By arranging history of property tax since the foundation of the People’s Republic of China and analyzing situation of property tax burden at present,this paper finds problems like unreasonable taxation system structure,a narrow scope of levy and unreasonable tax basis in current property taxation system.So,when designing the property tax system,problems exist in current property tax system should be taken into consideration to avoid repeating mistakes happened before.Second,using general and comprehensive measure index of property tax burden,this paper analyzes property tax burden in the United States,Japan and Canada,and then summarizes their experiences interms of levy scope,levy power and usage of taxation.Based on analyzing property taxation system and current tax burden of America,Japan and Canada,this paper designs schemes for caculation of property tax burden.Using data from China Family Panel Studies,this paper caculates national-level property tax burden using general measure index and calculates pain index of property tax in Wuhan using comprehensive measure index.Afterwards,this paper discusses the effect of tax burden from three perspectives: overall effect,fairness effect and welfare effect.The following conclusions can be drawn after analyzing the effect of tax burden.First,the effect of tax burden could be the same under different scheme of property tax.Second,property tax has the potential to create more income for government.Third,housing price and welfare are largely determined by the usage of taxation collected through property tax.Finally,after analyzing property tax burden and taxation system,this paper puts forward proposals from perspective of tax burden.First,the government should help residents to become more wealthy so as to enhance their capacity to pay for property tax.Second,attention must be paid to tax rate,taxation basis,scope of levy,and exemption rules.Third,enhanced supervision is needed and usage of taxation ought to be clearly restricted.Fourth,reforms related to property tax reform are needed,including reforms of relevant tax categories,budget transparency,levy system and propaganda system.