租稅支援模型의 摸索과 政策的 示唆點

Implication from the model of tax incentives

The main purpose of this paper is to form a model of the government’s subsidy provided in terms of tax reduction and to examine the implications of such a model. According to the theoretical analysis of the model, the tax subsidy should be given to goods which are neither pure public goods nor pure private goods. For pure private goods, the market allocates resources the most efficiently. There is no incentive effect of tax for pure public goods. Furthermore, the goods which are targeted by the tax subsidy must be price-elastic. On the other hand, goods close to public goods should be provided by government expenditure. The implications of the model to the current tax incentive system are as follows, Public firms need to receive tax support if they supply very public goods (or services). Otherwise, they will need to privatize. Subsidies for small and medium-sized firms are unable to find their rationales. Finally, the government should allows profitable side-business to the private firms in order to encourage the construction of social overhead capital in addition to tax subsidy.