the foundation should be a national policy of ground rent extraction
above the 90% line if plausible
existing experiments with local "property taxation look to be headed
way off the correct course
--- or so it would seem ---
--------------------------------------------------------------------------------------
here's a few out takes
from a recent Global Parnassian Press club take away :
"Efforts in China to broaden a pilot program that deploys property taxes
aimed at taming the real-estate market
are running into difficulties."
" for the past three years the party instituted a number of property-market control
including property-tax pilot programs in Shanghai and Chongqing,"
"aiming to head off risks of a bubble bursting and to improve affordability."
bubble pre emption is critical
but long run
affordability is a wrong headed goal.... of course it is !!!
"Proponents say a nationwide property tax
would increase the cost of holding property"
this is fallacious
a pure ground rent tax reduces market prices
ie
reduces pre existing re-sale values
" reduces incentives for speculators to buy"
cutting out the capitalized ground rent everywhere simultaneously
is perhaps operationalized in real land markets
only on a wack a mole basis
so
yes mistakes and losses will pile up
but
a whole very considerable class of rentier income can be scotched
with no long run curb on development
a land tax indeed would
" providing a more-permanent solution than the government's current reliance on administrative measures. "
property tax is an ambiguous composite of a user fee
a partial household wealth tax
and a ground rent tax
these three and what ever other objective might get rolled into a property tax
needs to be mutually articulated and separated
"Such a nationwide tax could also fit into China's pledge to stamp out rampant corruption"
yes by reducing local discretionary sale and credit activity
------------------------------------
"The eastern city of Hangzhou and the southern boomtown of Shenzhen could be the next cities to implement the property-tax trial"
"The State Administration of Taxation is studying the expansion of the property-tax trials."
"Shanghai levies a 0.4% to 0.6% tax on second-home purchases."
" Chongqing, the tax is levied on existing high-end homes and villas and ranges from 0.5% to 1.2%"
-------------------------------------------------
tallying up:
" the taxes are too low and too subject to a complex web of conditions to slow home-price appreciation."
"Shanghai's average new-home prices rose 11.9% in June compared with a year earlier,
while Chongqing's rose 6.8%"
trifles indeed !!!!
such that
"the existing pilot programs in Shanghai and Chongqing, begun in 2011,
have proved ineffective in holding down costs. "
which a ground rent tax would do
if costs here are market price for lots
" widespread opposition from local governments, officials, property developers,
are barriers to reform. "
just the sign it needs doing and pronto !!!!!
" increasingly vocal middle class are also a barriers to reform. "
then get it done NOW
at
"a key meeting of the Communist Party leaders in October"
since its already
" seen as an opportunity to roll out reforms."
-----------------------------------------
spade work ?
" The housing ministry is working on a nationwide database
of homeowner information that would aid the implementation of the tax."
"
alas not too encouraging so far
but but but
putting in the mere forms of extraction is still a first step ....
one li of a .thousand li journey
key incentive point to attack:
"Local governments prefer the lump sum revenue from land sales
to the slim pickings of property-tax income"
optimal answer since its a national tax
pay the local gub for the "right to inititiate a ground rent extraction"
and again each time rates increase
ie capital payments on the stream of revenues as they develop
--------------------------------------------------
.
"For China's middle class, a new tax would add to burdens
and
threaten the value of an asset now essential for their retirement saving."
add a burden ?
a ground rent tax ?
no not in the long run
but yes it threatens the market value of already owned lots
retirement savings
the answer there is of course the devilish details of an evolving
national pension system
at any rate
better to strike now
then later
when the massive minute vested interests
are onlygoing to get larger and larger
