【题 目】Understanding Misreporting: Responses to a Housing Transaction Tax Notch in China
Using proprietary data from a large real estate brokerage company that records both true and reported prices of its housing transactions, we study misreporting behavior under a housing transaction tax notch. Under an environment with weak tax enforcement, the tax notch creates a strong incentive for misreporting. We document a unique three-segment misreporting pattern, which is consistent with a simple model that emphasizes the tradeoff between tax-saving and misreporting costs. Exploiting a tax reform that reduced the tax rate above the tax notch, we estimate that a one percentage-point increase in the tax rate is associated with 3.5% to 14.9% less misreporting and 11.1% to 13.6% less tax evasion.
Xiaxin Wang (王遐昕) is an Assistant Professor in Fanhai International School of Finance (FISF) of Fudan University（复旦泛海国际金融学院）. His research focuses on various topics of taxation: elasticity of taxable income, bunching approach, tax evasion and tax avoidance, personal income tax, corporate income tax, and tax (tariff) incidence. He received a Ph.D. in Economics from UCSD in 2018, an M.A. in Economics from Peking University (CCER) in 2012. He published in leading economic journals such as Journal of Public Economics.