• 한국사회정책
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• v.20 no.3
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• pp.77-115
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• 2013

The purpose of this study is to present empirical evidence for discussion of financing social welfare via estimating optimal tax burden in the main member countries of the OECD by using Hausman-Taylor method considering endogeneity of explanatory variables. Also, the author produced an international tax comparison index reflecting theoretical hypotheses on revenue-expenditure nexus within a model to compare real tax burden by countries and to examine feasibility of tax increase in Korea. As a result of the analysis, the higher the level of tax burden was, the higher the level of welfare expenditure was, indicating the connection between high burden and high welfare from the aspect of scale. The results also indicated that the subject countries recently entered into the state of low tax burden. Meanwhile, Korea had maintained low burden until the late 1990s but the tax burden soared up since the financial crisis related to the IMF. However, due to the impact of foreign economy and the tax reduction policy, it reentered into the low-burden state after 2009. On the other hand, the degree of social welfare expenditure's reducing tax burden has been gradually enhanced since the crisis. In this context, the current optimal tax burden ratio of Korea as of 2010 may be 25.8%~26.5% of GDP based on input of welfare expenditure variables, a percent that Korea was investigated to be a 'high tax burden-low ITC' country whose tax increase of 0.7~1.4%p may be feasible and that the success of tax system reform for tax increase might be higher probability when compare to others. However, measures of increasing social security contributions and consumption tax were analyzed to be improper from the aspect of managing finance when compared to increase in other tax items, considering the relatively higher ITC. Tax increase is not necessarily required though there may be room for tax increase; the optimal tax burden ratio can be understood as the level that may be achieved on average when compared to other nations, not as the "proper" level. Thus, discussion of tax increase should be accompanied with comprehensive understanding of models of economic developmental difference from nations and institutional & historical attributes included in specific tax mix.

• Journal of Distribution Science
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• v.21 no.6
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• pp.83-89
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• 2023

Purpose: This paper considers the issue of corporate tax avoidance (CTA) in the distribution of the tax burden across companies in Vietnam because the high level of CTA leads to unfairness in taxation. In particular, we aim for discussing the way to measure the extent of CTA and explore the determinants of CTA that reflect the features of high-tax risk-taking companies. Research design, data and methodology: The study investigates factors influencing the CTA behavior of legal entities listed on the Vietnam stock market between 2012 and 2018 to fill the empirical research vacuum in the country. we employ the dynamic GMM estimate method. Interestingly, CTA is considered through three approaches, including two effective-tax-rate-based methods and especially accrual earnings Results: The results highlight tax - accounting book disparities have significant effects on CTA. In addition, firm size, net asset value, debt leverage, and tax-accounting books are related to CTA. Conclusions: Tax avoidance is shown to have a positive correlation with financial distress in this case. The higher a company's capital adequacy ratio, the fewer tax avoidance opportunities it has. The paper draws some recommendations to deal with tax avoidance that improves the fairness in the distribution of the tax burden among corporations.

• Journal of Venture Innovation
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• v.3 no.1
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• pp.165-182
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• 2020

This research shows solutions for relieving the reversibility of the VAT system, and the solutions will be reviewed with current issues about supporting welfare. The Followings provide practical implementing solutions for each issue. Since the VAT is taxed for all goods and services as a general consumption tax, it is efficient tax policy for resource allocation comparing to income tax. On the other hand, because of the reversibility of the tax burden is also treated as a non-effective tax system for fair taxation. Even it is a non-effective tax system, the VAT system takes the most portion from the total national tax. In South Korea economic system, it is hard to raise the VAT rate because the economic effects are tremendous. For the long-term, the possibility of increasing the VAT rate is unavoidable, considering the economy, society, environment and energy, and aging. Therefore, a variety of substituted policies for the reversibility should be covered once there is a conference for the increase in the VAT rate. This research provides foundational solutions by acknowledging the reversibility of the tax burden in terms of the effective value-added tax rate. The followings are four solutions. First, it is required to adjust the duty-free system for relieving the reversibility and expand the tax-free system as well as individual consumption tax items. Second, The relief of reversibility should be worked by imposing higher the tax rate for high-income people' goods and services. Third, the adjustment of the duty-free system could be considered due to relieve the reversibility of the VAT. Last, it is considered to adjust of the simplified taxation system because the simplified taxation system is seriously against the tax-transfer principles.

• KDI Journal of Economic Policy
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• v.13 no.4
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• pp.59-90
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• 1991

The purpose of this paper is to determine whether the rate schedule of the Korean income tax system embodies the theoretically desirable distribution of the tax burden by income classes. The paper follows the approach of Young (1990) who has estimated the utility function and calculated the magnitude of sacrifice, i.e., the tax burden. The main point of the study is to estimate the utility function. The estimation results may differ if different data sets are used. Therefore, this paper employs the effective as well as the nominal tax rate schedule. The findings derived in this paper are 1) that the effective rate schedule is more appropriate in estimating the utility function; 2) that the middle class has born the relatively heavier burden over time; 3) that the current income tax credit scheme curtails the tax burden on the middle class while intensifying the tax burden of the lower and upper income classes; 4) that reducing the amount of deduction moves the distribution of tax burdens by income classes closer to the theoretically desirable model; 5) that the rate schedule of the Korean income tax system, particularly in 1991, did not conform to the desired model as did the tax systems of developed countries such as the United States, Italy, Japan, and Germany.

• East Asian Journal of Business Economics (EAJBE)
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• v.9 no.3
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• pp.29-43
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• 2021

Purpose - The purpose of this study is to analyze the root causes of changes in the rankings of paying taxes in Japan and Korea from 2019 to 2020, and put forward relevant policy recommendations for China from the perspective of enterprise tax burden and tax compliance costs. Research design, data, and methodology - This paper analyzes the data information of four indicators of Japan and Korea in paying taxes from 2009 to 2019, excel tool was used to summarize the essential reasons for the changes. Result - The results showed that, through the reform of tax system, especially the application of electronic tax system for tax declaration, and this is the fundamental reason why Korea has surpassed Japan in the ranking of Paying Taxes in recent five years. Conclusion - Drawing lessons from the reforms in South Korea and Japan, it is concluded that China should improve its tax ranking through two ways. First, deepen the reform of the main tax and fee system and reduce the burden of enterprise taxes and fees. Second, further simplify the tax procedures. Return rights and responsibilities to the enterprise.

• KDI Journal of Economic Policy
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• v.40 no.2
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• pp.53-73
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• 2018

Using an overlapping generations model, this paper examines tax policy effects across generations. The model incorporates housing assets separately from capital assets and includes taxes on labor income, capital income, consumption and housing assets. Tax reforms for each tax rate have different effects on tax burdens across generations and the overall efficiency of the economy, leading to different welfare costs for generations. Specifically, raising housing property taxes results in the smallest welfare loss by future generations, as in the model it does not hurt economic efficiency and the tax burden increases mainly for the elderly, who have accumulated housing assets in preparation for retirement.

• Journal of Digital Convergence
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• v.10 no.6
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• pp.181-187
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• 2012

This study inquires into what effect the tax burden of investors, for typical taxes related to real estate investment; acquisition tax, comprehensive real estate holding tax, and transfer income tax, might have on the real estate investment behaviors; the purpose of long-term investment. These real estate investment behaviors have been analyzed to see how much they affect investment performance such as realized compound yield. This study model, which considers the fact that the choice of investment behavior for the degree of tax burden of investors may lead to different results in real estate investment, is expected to be an effective decision-making tool for investment.

• Journal of Industrial Convergence
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• v.8 no.1
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• pp.49-64
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• 2010

Penalty tax of basic law that has been revised in December 30, 2006 has been amended to tax 40 percent on no report and under-reporting in unjustifiable way. This revision is a punitive regulation that reflects the national tax service's will to not sit back and watch taxpayers' intentional tax evasion by imposing a heavier tax burden, and it raised penalty tax rate that has been applied leniently compared to foreign countries. Therefore, this study examines how changes in penalty tax rate affected faithful tax report and in what level the punitive penalty tax rate should be legislated so that the effect of the penalty tax rate can be maximized by performing empirical analysis on the effect on income tax rate reporting standard of self-employed businesses before and after the time the penalty tax rate increased dramatically from 33.3% to 300% based on the items.

• Management & Information Systems Review
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• v.17
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• pp.45-65
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• 2005

The purpose of this study is to contribute to a fundamental prevention of tax avoidance behaviors by individual businesses. For the purpose, this researcher surveyed factors surveyed individual business managers' disposition(type) of tax avoidance to determine factors influencing the avoidance, and proposed direction for further studies. Several hypotheses suggested here were verified to find that factors such as tax system, tax psychology, tax knowledge, social culture and the expectation of tax avoidance had effects on individual businesses' disposition of such avoidance. The multiple regression analysis made here showed that such factors as tax psychology, tax system and the expectation of tax avoidance affected the disposition of such avoidance and that the disposition was most influenced by tax system, followed by the expectation of tax avoidance and tax psychology in order. In conclusion, factors that have positive relations with tax avoidance, or tax burden and tax administration and those that have negative relations, or tax ethics and sanction are not helpful to preventing the avoidance. This is not consistent with previous results. Now behaviors of tax avoidance by individual businesses are prevailing and becoming more serious. In this sense, objective measurement devices should be developed to make possible further scientific studies about such behaviors. For the development, support by appropriate policies is needed.

• KDI Journal of Economic Policy
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• v.24 no.2
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• pp.53-82
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• 2002

Earlier papers, regarding this topic, have shown that the optimal environmental tax rate under the second best situation typically smaller than that under the first best world, the well known Pigouvian tax. This paper casts a doubt on the generality of this result, since the conclusion was derived from the models which employed rather strict assumptions on the utility function, which is homothetic and separable. This paper, with simple-static CGE model, shows that the result of earlier studies is sensitive to the assumption on the utility function. According to the simulation results, as previous studies pointed out, if the utility function is assumed to be homothetic, the optimal environmental tax rate is smaller than the Pigouvian tax. In contrast, if certain type of non-homotheticity is allowed, the optimal environmental tax rate could be greater than the Pigouvian tax. The results of this simulation also imply that the enlargement of environmental tax base could enhance the efficiency of overall tax system. Hence, there will be a less burden to share for the tax authority from the policy change.