Progressivity Measurement Of The New Real Estate Tax

Although the party made a clear proposal to accelerate the legislation of the real estate tax in the third Plenary Session of the 18 th CPC Central Committee.The State Council also approved the suggestion of continuing to expand the scope of the reform of the real estate tax reform of individual housing.But until today,a draft of the real estate tax law has not been submitted to the Standing Committee of the people's Congress for consideration.In the 2017 government work report,Premier Li Keqiang proposed that the legislation of real estate tax should be promoted in a steady way.The Minister of Finance issued a message in December 2017,that the legislation and implementation of the real estate tax should be promoted in accordance with the principle of "legislative advance,full authorization and step by step".The expropriation scheme of real estate tax should focus on what kind of functions should be set,which is the most controversial in the academic circle.This article holds that the real estate tax should be set around its fair function,and then discuss the progressiveness of the real estate tax according to the different schemes.This paper introduces discount method and circuit breaker mechanism,and uses China Family Panel Studies(CFPS)data to simulate three different collection programs of real estate tax from the perspective of redistribution effect with two calibers,including the per capita area exemption,the per family area exemption and the first suite duty-free program,and the previous experience in the design of the tax system of the United States,Japan and the UK for real estate tax is used for reference.It is found that:(1)The optimal area corresponding to the most progressive MT index with the discount method is about 20 square meters for the per capita deduction program and 80 square meters for the family deduction program,which seems smaller comparing to the results with non-discount method.We will underestimate the MT index and overestimate the optimal area if not discounted.(2)As for the redistribution effect on the full caliber of family property,the progressiveness of the per capita area exemption program will be enhanced,while the first suite duty-free scheme is weakened,and the family area exemption program is enhanced in the lower interval,and weakened when the area is higher.(3)The introduction of circuit breaker mechanism can significantly enhance the redistribution effect on the housing value but may dampen that of all the three programs on the family property.(4)The first suites duty-free scheme is the best choice for the redistribution of property and income as well as the feasibility of short-term management.Based on the research results,two policy recommendations are put forward: first,when the real estate tax collection scheme is established in China,it is necessary to consider the first suite tax exemption scheme.The two is that the introduction of real estate tax should deal with the long-term and short-term relationships.The innovation of this paper is mainly reflected in the following three aspects,one is using the method of tax discount to transfer the taxable amount of flow to the tax value of the stock,in order to properly resolve the immediate tax burden and the stock of real estate value does not match the problem,the result is more scientific;The two is to combine the mechanism of circuit breaker to recalculate the degree of progressiveness under the premise of considering the ability of family tax payment,it reflects the principle of capacity and burden of Taxation,and solves the problem of the disagreement between family theoretical tax burden and actual tax burden.The three is the comprehensive use of two kinds of caliber including family property values and family property values,so as to analyze whether the redistribution effect of real estate tax on family property is affected by the size of the caliber.