Estimation Of Chinese Urban Households’ Ability To Pay Real Estate Tax And Tax Expenditure Design

Real estate tax is becoming a hot topic now.Central government and ordinary people pay great attention to the reform of real estate tax.With more in-depth discussions,however,there is a vital Considerable problem whether Chinese household has ability to pay real estate tax or not.As the object of real estate tax,residents7 own houses are the accumulation of wealth in the past.If people have no ability to afford the tax,any reform is hard to success.As a result,it is necessary to discuss the ability to pay property tax.This essay integrates method of qualitative analysis with quantitative analysis to analyze our residents’ ability to pay property tax.The first part:Introduction.This part briefly explains the background,defines the key concepts used in this paper,summarize the existing literature and research findings at home and abroad,illustrate the innovations of the paper.The second part:Economic theories.The ability-to-pay principle and tax expenditure are explained in this part.There are still many disadvantages against the ability-to-pay principle in Chinese nowadays property tax system.So it is necessary to follow the ability-to-pay principle and ensure the source of local government finance.The third part:Calculation.The writer designs several simulations of real estate tax and index of ability to pay.The residents’ ability to pay tax is measured according to China Household Finance Survey(CHFS)2013.The fourth part;Tax expenditure programs.The character of households without ability to pay are summarized and explained from income,tax,real estate and other perspectives.The tax expenditure programs are designed to help these residents by above characteristics while the cost and outcomes are assessed.Conclusion:Tax deduction and exemption based on area or value of real estate will lead to much loss of tax income.There are some households without ability to pay tax in multiple simulations.It is possible to design tax expenditure programs referred to circuit-breaker to help these households.The measurement to cost and outcome shows that it is best to carry out the tax plan without any deduction on basis of effective tax expenditure.Innovation:The residents’ ability to pay tax are measured in multiple indexes.Combining with China’s actual situation,the writer designed concrete tax expenditure programs and measured the cost and outcomes of it.