適正 個人所得稅率體系에 관한 實證研究

An Empirical Study on the Optimal Progressivity of the Personal Income Tax in Korea

This paper focuses on estimating optimal linear income tax rates based on the 1988 Korean family income and expenditure survey. The model used is similar to the one adopted by N .H.Stem in his paper and thus takes into account the issues of balancing the gains in distributional equity against the costs in terms of the distorted decisions about work efforts. A generalized utilitarian social welfare function is used as a criterion for judging the extent of distributional equity. The major findings of this study are as follows. The elasticity estimates of substitution between leisure and income ranged from 0.52 to about 1.0, implying that the labor supply function tends to be backward-bending. The optimal marginal tax rates are much lower than commonly anticipated, and vary inversely with the elasticity of the substitution for a given degree of the society’s aversion to inequality. Our results indicate that, applied to a broader base of total income with a uniform lump-sum subsidy, a flat-rate tax of about 20 to 30 percent is sufficient to satisfy the government revenue requirement with a considerable gain in efficiency and equity over the current income tax system which has the marginal tax rates ranging from 6 to 55 percent.