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한국개발연구. Vol. 29, No. 2, December 2007, pp. 177-196
https://doi.org/10.23895/kdijep.2005.29.2.177
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Dynamic Welfare Effects of Tax Reform: Case of Korea
Abstract
This paper analyzes welfare effects of revenue neutral tax reform using a small open economy dynamic general equilibrium model. We apply this model to the Korean data and examine welfare effects of various tax reforms; removal of capital income tax and/or labor income tax financed by consumption tax. We investigate both long run equilibrium and transitional dynamics. The results suggest that there are sizable welfare gains (1-3% of lifetime consumption) when factor income taxes are replaced by consumption tax. Overall gains are generated by long run gains despite short run welfare losses. However, there is welfare loss when capital income tax is replaced by labor income tax.
Keywords
tax reform(조세제도개편), revenue neutral(세수보존), Korea(한국), welfare(효용)
JEL Code
E6
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Other articles from this issue
- On the Efficacy of Fiscal Policy in Korea during 1979~2000
- An Evaluation of Korea's 20-Year ODA
- A Study on the Pattern Changes and Determinants of Corporate Cash Holding
- A Test on the Efficiency of Monetary Policy in Korea
- IV ECM Threshold Cointegration Tests and Nonlinear Monetary Policy in Korea
- Estimating the Benefits of the Korean Public Housing Program for Low-Income Families Under Non-Homothetic Preference
- Dynamic Welfare Effects of Tax Reform: Case of Korea
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