China’s long wait for a tax everyone loves to hate

IF SUN YAT-SENNPC had got his way, China would have been a bold pioneer in the taxation of real estate. During his exile in Europe from 1896 to 1898, the republican revolutionary fell under the spell of Henry George, an influential American journalist who believed a single tax on land should replace all others. Sun hoped pre-industrial China could adopt such innovations more easily than the West, because it was “unimpeded by the opposition of entrenched capital”, as one scholar put it.Instead China has become a timid procrastinator in the taxation of real estate, particularly of the property built on top of land, as opposed to the land itself. It first proposed a recurring tax on the value of property in 2003. And it introduced a half-baked pilot scheme in the cities of Shanghai and Chongqing in 2011. The tax was included in the five-year legislative plan of the National People’s Congress (), China’s rubber-stamp parliament, in 2015. But things went no further. Reform, it seems, was impeded by the opposition of entrenched interests, including no doubt many officials who would prefer not to declare their properties, let alone pay taxes on them.