This seminar presents a scheme design of local property taxation. The design consists of two parts: a theoretical framework to tackle the general principles in designing the tax for a transitional economy and a set of strategies in implementing the designed tax, using Mainland China as the target country context.

The speaker will elaborate on several major issues. He will first answer the question of why the real property tax is crucially needed in current day China, starting with a fiscal system’s approach to taxation and using this approach to explain why the property tax is an inherent part of any country’s tax system. He will offer an empirical analysis of micro-level housing data from Beijing to reveal the inequity and inefficiency of the current scheme of education financing.

The speaker will examine the institutional obstacles, including the property right and use right to urban land. The speaker will discuss a set of six principles to consider when designing the tax and evaluating any design to see whether it fits the generic political-economic theory as well as practicality of public finance, especially at the local level. Finally, the speaker presents several strategies that are practical in China’s context for adopting the property tax, given the conundrums the government has been struggling with. As an undertone, the seminar depicts the adoption of the real property tax as a reshuffling of China’s intergovernmental relations and local governance, not merely a new tax.

The speaker then will present another empirical study using countrywide household survey data to show that under the proposed tax scheme, the broad-base, low-rate local property tax is affordable to the great majority of homeowners and that low-income families will get net benefit from the tax, more so than the middle class, vis-à-vis high-income families.

The speaker uses the “window paper effect” as an analogy to depict the status quo of the challenges C