Real Estate Taxes, Fiscal Decentralization And Local Public Goods Supply

Accompanied personal property taxes levied in Shanghai and Chongqing pilot by early January2011, China’s real estate tax system has begun to reform. Real estate tax system take the important role of country’s macro-control and the real estate market healthy development. In recent years, the real estate market is developing rapidly. Real estate tax increase fastly, But the real estate taxes is still relatively small proportion of fiscal revenue accounted, the property tax levy will be a significant impact on the revenue structure of local government. On the other hand, Local government exists apparently bias in the supply of local public goods. Non-economic public goods such as education and health care, were surported lessly..Economic public goods, such as transportation and energy infrastructure investments, had government’s "Pro-gaze". This paper attempts to examine the impact of the real estate tax on the efficiency of local public goods supply.Accord to the theoretical models and empirical analysis,this article find that there is a positive impact on the overall efficiency of local public goods supply,for the real estate taxes. Real estate tax would increase the efficienc of local public goods, Especially in social services and other non-economic public goods. This article also found that the local goverment’s land revenue has a tremendous impact on local public goods supply. The local goverment’s land revenue has played a huge role in the investment of infrastructure and economic public goods. It also verified some scholars’s view that local government had depended the "land finance". Another,,empirical analysis found that, In the current fiscal decentralization seytem,the uper government’s transfer payments provide education, health care and other social and public services more efficiently. Finally, according to the results of the analysis, we put forward policy recommendations.IT’consist of two points, First, wo need reform the realestate taxsystem and levy property tax comprehensively.sothat the local government can expand the source of tax revenues steadly. The secondly,we need reform the current fiscal decentralization further deeply to eliminate the phenomenon of local government "land finance" and Transfer the local government functions.