Do Procedural Justice and Retributive Justice Enhance Support for Property Tax?

• In Event: Social Policy, Redistribution, and Inequality in China

Abstract

The adoption of property tax often faces significant challenges in many developing countries. Enhancing administrative capacity for assessment and compliance is undoubtedly important, but addressing the political impasse caused by potential mass resentment poses a more formidable challenge. We explore whether the government’s commitment to uphold justice and morality enhance tax morale in societies with weak democratic institutions. We investigate two dimensions of justice that the government can uphold: procedural justice, achieved through responsiveness to citizen demands in policymaking; and retributive justice, realized by punishing corrupt officials. To assess their impact on property tax preferences and compliance behaviors in urban China, we conducted a conjoint experiment and a lab-in-the-field experiment. The former reveals that both types of justice have positive effects on property tax policy preference; however, the results of the latter provide strong evidence that signaling retributive justice is more influential in shaping tax compliance behavior.

Authors

• Xiaobo Lu, University of Texas at Austin

• Lily Tsai, Massachusetts Institute of Technology

• Minh Duc Trinh, Purdue University

• Ping Zhang, Fudan University