2008 - 2010
Faced with the challenges of aging, globalization, global environmental issues and growing disparities, Japan's socio-economic structures are undergoing significant changes that necessitate fundamental reforms in the tax system. With this awareness, this project has utilized developments in tax theory to consider appropriate tax systems that correspond to socio-economic structural changes from a medium-term to long-term perspective. During the current fiscal year, the project will expand upon the analysis undertaken in the previous year and will also take up new analytical issues. Specifically, the following critical issues will be considered and research themes will be selected from areas where academic contributions can be made: the relation between social security and taxation in an aging society; capital gains taxation in an environment of economic globalization; and systems of local taxation corresponding to advances in decentralization. Currently, the project has adopted three research themes:
- (1) Analysis of transfer and incidence of corporate taxes;
- (2) Economic impact of tax-based public pension systems: simulation analysis using multi-sector overlapping generations model; and
- (3) Analysis of social security and taxation.
Japan faces the challenges of the aging of the population, globalization, global warming and growing economic disparity even while it is undergoing significant changes in its socio-economic structure. In this project, we take the position that these ongoing changes necessitate corresponding and fundamental changes in the taxation system. Adopting various findings from tax theory and taking a medium- to long- term perspective, this project examines the features of a taxation system that would correspond to Japan's ongoing socio-economic structural changes. Specifically, the following issues will be addressed: analysis of the shifting and incidence of corporate income taxes; simulation analysis of tax reform using dynamic general equilibrium models; analysis of social security and taxation using generational accounting methodology; and economic impact of environmental taxes.
Japan is currently facing the problems of an aging society, globalization of the economy, the global environment, and inequality, and it is exposed to change in its socioeconomic structure. Since a fundamental reform is also necessary in the tax system to address these changes, this research focuses on the desirable tax system that will respond to the changes in the socioeconomic structure from a medium to long-term perspective, incorporating recent developments of tax theory. For this purpose we will build a dynamic stochastic general equilibrium model that makes possible the simulation of tax reform proposals in line with policy issues in Japan, and we will analyze the effects of fundamental tax reform on economic activity and people's welfare, also discussing the direction of the reform.
Until June 30, 2010
Major Research Results
RIETI Discussion Papers
"Economic Effects of Financing Public Pension Plans from Tax Revenue" (HASHIMOTO Kyoji and KIMURA Shin)
"On the Future of Government Subsidies to Health and Long-term Care Insurance" (IWAMOTO Yasushi and FUKUI Tadatoshi)
"A Simulation Analysis of the Incidence of Corporate Income Tax" (DOI Takero)
RIETI Discussion Papers
"Gasoline Tax Rates from the Perspective of Optimal Taxation Theory: Comparison among Japan, the U.S., and the UK" (KAWASE Akihiro)
"Dynamic Applied General Equilibrium Analysis for Fiscal Reconstruction Based on a Multi-sector Overlapping Generations Model" (KIMURA Shin and HASHIMOTO Kyoji)
"The Efficiency versus Equity Trade-off: Observations from survey data" (MORIKAWA Masayuki)
"Tax and Insurance Premiums as Financial Resources for Social Security" (IWAMOTO Yasushi)
"Estimation of Future Tax Revenue" (HASHIMOTO Kyoji and OH Sunchung)