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Property tax is a very important category of taxation, which does not yet exist in China.

Without such a tax, it is difficult for the State to adjust social and economic relations and the local governments receive less financial resources. Therefore it seems reasonable that a property tax be introduced.

The property tax now in government discussion is called wuye shui tax on real eastate.

Many think it should be called caichan shui property tax, according to its more universal meaning. Wuye shui easily leads people to think that it is a tax only on housing or that its purpose is to adjust housing prices.

It would be totally wrong if the government had wanted to adjust housing prices by introducing this tax because it would not help to realize this goal.

To establish a property tax at a rational rate will help promote social fairness and save economic resources. Rich families have more property so get more service from society.

For example, the rich benefit more from social stability and a low crime rate.

Poor people also need social stability and a good environment but they gain less financial benefit from these. Therefore it is only right for the rich to pay a greater property tax. The concept of the rich being more heavily taxed than the poor should be popularly accepted.

Not only should there be a rational tax rate for the property tax, but there should be a rational starting point for taxation. A low tax rate may not cover the cost of taxation nor play a positive function, while a very high tax rate may affect economic vitality.

Property tax should be collected not only on housing but also on land. Taxpayers should not only be families but also profit-earning organizations. The property tax should include all kinds of taxpayers to avoid evasion.

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