Korean Tax Reform for the Global Era

소개

As deregulation and liberalization prevail, financial policy tends to lose its effectiveness. Fiscal policy instead has assumed a greater role.
These global changes necessitated world wide tax reforms: countries responded to the new environment either by reducing corporate taxes or by adopting separate taxes on capital income.
East Asian Countries, Korea, China and Japan are geographical neighbors who share some of their common cultural heritages but, at the same time, they differ in many other aspects.
In spite of such differences, these countries are confronted with the same global economic transformation.

목차

I. Introduction

II. Changing Environment and Tax Reform
1. Globalization and Changing Environment
A. Globalization and Tax Competition
B. Evolution into Information Age
C. Increased Demand for Social Welfare
D. Environmental Protection
2. Basic Nature of Tax Reform
A. Tax Reform That Responds to Globalization
B. Comprehensible Taxation
C. Establishment of Green Tax Reform

III. Tax Reform for the Globalization Age
1. Tax Competiton and Broadening Tax Base
A. Adjustment of Deductions & Credits
B. Capital Gains Taxation
C. Taxes on Fringe Benefits
D. Adjustment of Tax Rates and Tax Base Brackets
2. Corporate Taxation in the Global World
A. Corporate Taxation under Tax Competition
B. Corporate Tax Rates
C. Introducing the Consolidated Tax Return System
3. Sound Social Welfare Financing
4. Taxing E-Commerce in the Age of Information
5. Tax Administration in the Global World
A. Increasing the Number of Bookkeepers
B. Enhancing Transparency
C. Realignment of Tax Administration
6. Green Tax Reform and International Cooperation

References

본문내용

1. Globalization and Changing Environment

A. Globalization and Tax Competition

As globalization progresses, the international mobility of factors of production, especially capital has been accelerated. Liberalization and deregulation of financial markets that started from 1980s, have facilitated capital movement into the most efficient markets. This led to a further deregulation with a result of free market taking its major role. Government authorities instead assumed the role of making and supervising rules that promote fair competition.
The integration of financial markets has facilitated capital movement across borders, which in turn prompted tax competition. Each country has an incentive to slash capital tax burden to attract foreign capital and to prevent domestic capital flights. In particular, corporation taxes and business income taxes has become major targets of tax competition. The fall in the OECD countries’ average corporation tax rate from 41.6% in 1986 to 30.6% in 2000 illustrates the extent of competition.
Tax competition is also going on with respect to personal income taxation. Especially, within Europe, cross-country movement of labor, particularly high quality labors, is quite frequent. Therefore, the OECD highest marginal tax rates of personal income taxation, on average, have shown a continuous downward trend from 54.6% in 1986 to 39.5% in 2000 as governments tried to stimulate human capital formation and to curb outflow of high quality labors.

참고자료

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