HOW PROGRESSIVE IS THE MOST POPULAR TAX SCHEME? THE CASE OF SOUTH KOREA

Taejun Lim; Aram Kim

doi:10.15057/hje.2023001

HOW PROGRESSIVE IS THE MOST POPULAR TAX SCHEME? THE CASE OF SOUTH KOREA

Taejun Lim, Aram Kim

Department of Economics

Korea University

Research output: Contribution to journal › Article › peer-review

Abstract

Using a structural model and the 2018 Korean economy data, we show that even the individuals with relatively low income do not always prefer greater tax progressivity due to reduced economic efficiency (i.e., decrease in aggregate output and consumption) it accompanies. Hence, the counterfactual analyses reveal that the most popularly supported tax and redistribution policy in this economy does not uphold the optimal degree of progressivity for social welfare maximization and sustains about 0.31 of after-tax Gini.

Original language	English
Journal	Hitotsubashi Journal of Economics
Volume	64
Issue number	1
DOIs	https://doi.org/10.15057/hje.2023001
State	Published - Jun 2023

Keywords

Optimal Tax
Political Economy
Redistribution
Tax Progressivity

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10.15057/hje.2023001

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HOW PROGRESSIVE IS THE MOST POPULAR TAX SCHEME? THE CASE OF SOUTH KOREA

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Keywords

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