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The land issue has been a hot potato related to human life in all ages, and all basic necessities of human life can't get away from it. In order to settle the land issue, land value increment tax is generated, the collection of which shall main two systems, one is to maintain the private land ownership, i.e. the lands are owned by privates rather than the state, and the other is to generate transaction value upon land ownership transferring. This transaction value is generated under rational economy and appropriate supply and demand instead of inelastic transaction value with public power involved in.
The land value increment tax is collected when the land ownership is transferred or the pawning right is set. It refers to a proportion of the unearned increment in the total amount of land appreciation. The unearned increment is resulted not from work of individuals, but from social progress, economic development and team effort. The social progress, traffic improvement and naturally generated property are together shown on urban lands by the unearned increment. In order to realize social equity and justice, the unearned increment shall not be exclusively owned by individuals. Part of the unearned increment shall be deducted by a certain rate to serve as the land value increment tax with the left to be private to safeguard natural equity and justice.
The unearned increment of land is attributed to the fact that the governments at all levels construct or improve roads, bridges, ditches, ports, wharfs, reservoirs, and embankments, dredge up water courses and other land and water projects in their jurisdiction so as to benefit lands around, advance public investment construction, enhance land use, facilitate traffic and prevent natural disasters (article 2 of project benefiting charge collection regulations). The benefited land shall share expenditure in public works based on the theory of user's fees, thus the unearned increment is generated, from which the gains without pain is removed by means of land value increment tax, so the land value increment tax and project benefiting charge is levied on the same benefited object. However the two kinds of tax both aim to cooperate with the development of economic policies and promote more effective urban land use. Furthermore, they also have an interactive effect on the financial source of city construction. However, they still have some differences from each other. This article compares the land value increment tax with the project benefiting charge in order to enrich local construction fund and realize social justice.
Centering on the land value increment tax and project benefiting charge, this essay discusses related laws and levy practice. The whole text breaks into eight chapters, and the content of each chapter is briefly as follows:
Chapter One Introduction. It aims at explaining the motive, objective, scope and method of the research, so as to make suggestions to the legislature and to establish a sound duty system.
Chapter Two Comparison between Land Value Increment Tax and Project Benefiting charge Theories and Research into both. This chapter relates to theoretical system of land value increment tax and project benefiting charge. Firstly the traditional taxation theory finds its root in Confucianism with the objective of "Equality and Supporting All", then it analyzes the development of taxation thoughts in all ages of China, the physiocratic school and the classic school in the West by following the prescribed order, and finally it describes the theory of user fees and substantial taxation.
Chapter Three Legal Nature of Project Benefiting charge. This chapter discusses the legal nature of project benefiting charge, goes in-depth to the nature of taxation, stipulated fees, special public dues or unjustified benefits from public laws, and explains the category and attributes of project benefiting charge.
Chapter Four Object of Land Value Increment Tax and Project Benefiting charge Collection. This chapter concretely defines the land value increment tax and project benefiting charge, discusses the object, content, scope of tax collection, and specifies problems related to the practice of current tax law and project benefiting charge, and furthermore, it explores the issues, including: preferential rate of the land value increment tax applied to self-use housing estate, regulations on tax reimbursement for housing estate repurchasing within 2 years, and recovering tax reimbursement of land value increment tax and problems of project benefiting charge credit.
Chapter Five Comparison of Exemption Scope between Land Value Increment Tax and Project Benefiting charge. The exemption scope of land value increment tax and project benefiting charge is defined in this chapter, and whether the horizontal equity, vertical equity and principle of ability to pay, and the influence on public investment extension are studied from the view of both theory and demonstration.
Chapter Six Applicable Laws and Regulations Related to Collection Procedure of Land Value Increment Tax and Project Benefiting charge This chapter discusses such procedural laws as administrative procedural law and tax law related to the declaration, verification, implementation and demanding of land value increment tax and project benefiting charge.
Chapter Seven Reconciliation of Land Value Increment Tax and Project Benefiting charge. This chapter covers several aspects, including: whether there are contradictions in theories and practices of land value increment tax and project benefiting charge, whether they could be incorporated for taxation, the collection of the project benefiting charge of transport facilities, and how the project benefiting charge and land value increment tax exert their functions to promote trades and advance social progress and prosperity.
Chapter Eight Conclusion. This chapter summarizes the whole essay, suggests and expects the government could, under the political and the financial support of project benefiting charge, appropriately expand public construction, promote economic activities and strengthen the competitiveness of the country.
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