2009 Fiscal Year Final Research Report
Dynamic General Equilibrium Analysis of the incidence of corporate income tax
| Project/Area Number |
19730224
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| Research Category |
Grant-in-Aid for Young Scientists (B)
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| Allocation Type | Single-year Grants |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | Keio University |
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Principal Investigator |
DOI Takero Keio University, 経済学部, 教授 (60302783)
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| Project Period (FY) |
2007 – 2009
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| Keywords | 法人税 / 税制改革 / 動学的一般均衡理論 / シミュレーション分析 / 企業金融 |
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| Research Abstract |
Incidence of corporate income tax is an old and new problem in public economics. In Japan, under discussion on the tax reform, raising consumption tax (VAT) will be needed and the burden of corporate income tax is heavier than other countries. Against the argument, there is an objection that the policy package of consumption tax increase and corporate income tax cut is politically unacceptable. In the background, it is intuitively thought that consumption tax is mainly beard by consumers and corporate income tax is mainly beard by corporations. Such asserters ignore the previous studies of the shifting and incidence of corporate income tax.
In such present situation, it is necessary to examine analysis of the incidence of corporate income tax to discuss the hereafter tax reform, especially consumption tax increase and corporate income tax reduction. In this research, we build a theoretical model to investigate tax incidence, and implement numerical analysis.
Static analysis of incidence
… More
of tax started from the pioneering study by Harberger in 1962 had been developed into dynamic analysis to consider the intertemporal resource allocation. On the other hand, about the analyses of the tax reform in Japan, the simulation analyses prospered in the late 1980s when consumption tax (VAT) was not be introduced, and some analysis were done in the mid 1990s when the tax system was revised. But such analyses are scarcely made in recent years. In addition, the previous simulation analyses of tax reform mainly focus on the loss and gain of each agent with tax reform. These analyses do not prove the incidence of the burden of corporate income tax clearly.
Recently, in the US, several scholars implement numerical analyses of the incidence of corporate income tax. However, they employ a static model without corporate finance. Unfortunately, there is no empirical study on it in Japan over a few decades.
In this research, while considering the tide of this precedent study, we focus on the incidence of the burden of corporate income tax and analyze it on the basis of Japanese tax system and macroeconomic data. Especially, it is necessary to consider in the dynamic macroeconomic model that can analyze it to explain the intertemporal incidence. By building dynamic macroeconomic model, it is able to analyze not only the instantaneous incidence of corporate income tax but also consider the intertemporal incidence.
In the short run (for one year), a percentage of the incidence on labor income is about 50-80%, and a percentage of the incidence on capital income is about 20-50%. In the long run, about 95% of the incidence is on labor income. Almost all of the incidence is shifted to labor income, but not all of the incidence is. Less
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Research Products
(6 results)
