Abstract:

The adoption of the property tax is a project of systems engineering that affects the immediate interests of every family. As a mainstay of local government revenue, the property tax is not just a tool for local governments to raise revenue or to mitigate enlarging wealth disparity. It is more importantly an instrument to promote China’s underlying reforms including many missions. Being a bond between local residents’ tax burden and benefits, the levy and use of the property tax enable localities to provide public services more responsibly and efficiently and to cultivate modern responsible citizens with high public spirits. In order to launch the reform of property tax smoothly, top-level design in state governance should be secured, protecting the rights and interests of taxpayers and regulating the power of governments.

Key words: modernization of governance, tax capacity, expenditure responsibility, property tax, local governance capacity