Adjust wealth distribution with housing property tax
Updated: 2013-10-22 19:42
As property prices surge in big cities, the government should not wait any longer to levy the housing property tax, says an article of the 21st Century Business Herald. Excerpt:
High property prices make two kinds of people, the "house uncle" and the "house slave". The former refers to the owners of many houses. The latter are the people paying burdensome mortgages for their only home or the people who cannot afford to pay the down payment.
Rising property prices have undoubtedly become a main facto in the widening the income gap.
A property tax will not only help cool the market but also effectively adjust the distribution of national wealth.
The difficult part is local government reliance on land finance. Revenues from land transfers are important income sources for the governments to pay for the public services.
The housing property tax, if well-implemented, will pull the trigger of serial changes and force the central government to implement some important supporting reforms, such as the tax distribution among governments of various levels to match their revenue to their duties.