An Empirical Study Of Property Tax Rate Setting

With the background of local financial plight, and the present property taxsystem's serious defects, property tax reform has become inevitable. According tointernational experience, property tax can provide a stable source of revenue for localgovernments. Thus, property tax is in its way, and rate setting is one of the mostimportant aspects in the whole property tax system. Based on advanced theories andresearch methods, this thesis aims at property tax rate setting, using Ningbo City as acase study for rate setting, doing a public questionnaire survey, and combiningstatistical analysis. The content of the research includes as follow:1) Make some assumptive choices for the tax rate setting preconditions,combining research achievements and international experience, as well as the facts ofChina.2) Set property tax rates via three methods, and comprehensively evaluate thesemethods of their advantages and disadvantages, and their applicability, etc., takingNingbo City as a case.3) Investigate the public acceptance of tax rate through questionnaire survey andstatistical analysis, and analyze factors that influence public rate choice.4) Give some policy suggestions for property tax rate setting, combining with theresults of case study analysis and public investigation.The main conclusions of the research include:In the initial period, setting tax rate according to the principle of revenue neutraland public acceptance is applicable, and tax rates set by these two methods arepublicly acceptable. While in a mature system, "spend-and-tax" method is moresuitable, because using this method, the property tax will bring the local governmentmore revenue.The knowledge and attitude, and social and economic factors all influence thepublic acceptance of tax rate level. The output of statistical analysis shows that factors like the residents' knowledge on property tax, support level, educational level andfamily income all have a significant positive correlation with the acceptable tax ratelevel. Meanwhile, the public's estimation of the whereabouts of tax revenue alsoinfluents their choices of tax rate level. If people know that they themselves will bethe final beneficiaries, they will be willing to pay more tax, while if they don't believethe government will use property tax revenue for public investment, they do not wantto pay.