Impact Research Of Local Government Behavior On The Effect Of Property Tax Reform

The analysis of the effect of property tax reform has been a hot research topic in macroeconomics.Most of the existing analysis of the effect of property tax reform shows that the property tax reform can play a role in controlling house prices and stabilizing the real estate market.However,since the property tax was piloted in Shanghai and Chongqing in 2011,not only did housing prices in Shanghai and Chongqing not fall,but they continued to rise during the period 2011-2019,which has caused reflections by scholars and policy makers.Many scholars believe that this may The national policies and policies,the psychological expectations of purchasers,and the contribution of real estate agencies are related.This article attempts to analyze the effect of property tax reform from the perspective of local government behavior.We find that the traditional analysis of the effect of property tax reform often ignores the element of local government infrastructure expenditure behavior.This article is to incorporate the local government infrastructure expenditure behavior into a DSGE model framework with property tax to further analyze the effect of property tax reform.This not only enriches the existing research,but also has certain theoretical significance and practical value.This article is divided into five parts: introduction,model setting and solving,numerical simulation analysis,robustness analysis,and conclusions and recommendations.The introduction introduces the research background and significance,research status,research methods and content,innovations and deficiencies.The model setting and solving include two parts: model setting and model solving.In the process of model setting,in order to analyze the effect of local government’s infrastructure spending behavior on the effect of property tax reform,this article was constructed by Luo Yongmin and Wu Wenzhong(2012).Based on the model,referring to Mei Dongzhou,Cui Xiaoyong,and Wu Yu(2018),a model including the behavior of local government infrastructure expenditure was constructed.Unlike the model built by Luo Yongmin and Wu Wenzhong(2012),the goal pursued by local governments under fiscal decentralization and GDP promotion incentives is to maximize fiscal expenditures,and local government expenditures include infrastructure expenditures and non-infrastructure expenditures.After the model is set,the constructed model is solved by mathematical methods.The numerical simulation analysis mainly includes three parts.The first part is to calibrate the parameters in the model through the research conclusions of previous scholars,and the second part is to make a positive impact on the entire model based on the parameter calibration.Numerical simulation analyzes the effect of property tax reform in the absence of local government behavior.The third part is to set the second part as a benchmark to analyze the difference between the effect of property tax reform in the presence of local government behavior and the absence of local government behavior,and further analysis based on different localgovernment spending preferences.After the numerical simulation analysis is completed,the corresponding robustness analysis is performed by adjusting parameters with large differences in calibration values.The research results show that when the local government’s infrastructure spending behavior is not considered,the collection of property tax can have the effect of controlling house prices and stabilizing the real estate market.However,after taking into account the local government’s infrastructure spending behavior,the collection of property tax will increase the local government’s infrastructure expenditure,coupled with the characteristics of China’s fiscal decentralization and GDP promotion incentives.The increase will further affect the real economy and bring positive macroeconomic effects on housing prices.At this time,the effect of implementing the property tax to regulate the real estate market may be greatly reduced due to the existence of local government infrastructure spending behavior,which may not bring the effect of controlling house prices,stabilizing the real estate market,and may even further promote housing prices and increase real estate market bubble.