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Housing property tax, economic growth, and intergenerational welfare: The case of China

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  • Li, Shiyu
  • Lin, Shuanglin

Abstract

In an endogenous growth model of overlapping generations, this paper shows that an introduction of a housing property tax in China increases physical and human capital accumulation and growth rate of output in the long run no matter the revenue from housing property tax is used for reducing government debt, personal income tax, or capital income tax, or for increasing government education expenditure. The tax reform has a strong inter-generations redistribution effect, i.e., it increases the welfare of future generations but reduces the welfare of current generations.

Suggested Citation

  • Li, Shiyu & Lin, Shuanglin, 2023. "Housing property tax, economic growth, and intergenerational welfare: The case of China," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 233-251.
    • Handle: RePEc:eee:reveco:v:83:y:2023:i:c:p:233-251
    DOI: 10.1016/j.iref.2022.07.010
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    1. Deng, Qiu Shi & Alvarado, Rafael & Cheng, Fang Nan & Cuesta, Lizeth & Wang, Chun Bao & Pinzón, Stefania, 2023. "Long-run mechanism for house price regulation in China: Real estate tax, monetary policy or macro-prudential policy?," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 174-186.

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    More about this item

    Keywords

    Housing property tax; Overlapping generations model; Growth; Intergenerational welfare;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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