A quantitative analysis of the tax and social security systems in an aging Japan
| Project/Area Number |
15530215
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | OKAYAMA UNIVERSITY |
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Principal Investigator |
OKAMOTO Akira Okayama University, Graduate School of Humanities and Social Sciences, Associate Professor, 大学院社会文化科学研究科, 助教授 (10294399)
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| Project Period (FY) |
2003 – 2006
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| Project Status |
Completed (Fiscal Year 2006)
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| Budget Amount *help |
¥2,500,000 (Direct Cost: ¥2,500,000)
Fiscal Year 2006: ¥600,000 (Direct Cost: ¥600,000)
Fiscal Year 2005: ¥600,000 (Direct Cost: ¥600,000)
Fiscal Year 2004: ¥600,000 (Direct Cost: ¥600,000)
Fiscal Year 2003: ¥700,000 (Direct Cost: ¥700,000)
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| Keywords | aging population / tax reform / public pension reform / life-cycle general equilibrium model / simulation analysis / benefit and burden / progressive expenditure tax / national burden rate / スウェーデン型年金制度 / 所得再分配 / 公的年金制度 / 相続税 |
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| Research Abstract |
With a population that is rapidly aging, Japan faces serious public finance problems, particularly when it comes to tax and social security issues. The structural reforms are urgently needed to accommodate the impending demographic change. We look at the Japanese tax and social security systems through a life-cycle general equilibrium simulation model. We aim to establish guidelines for fiscal reform in Japan's graying society and use such advanced modeling techniques to permit the calculation of the effects of alternative tax policies on capital accumulation and economic welfare.
The following three main conclusions have been drawn.
1. The simulation results show that a progressive expenditure tax stimulates much more capital accumulation than a progressive labor income tax. Thus, this new tax regime may hold the key to overcoming the large welfare loss Japan faces as its society ages under the current tax system. We also examined a desirable tax combination along the lines of the current Japanese tax and social security systems. The results suggest that an increase in the rate of tax on consumption and a decrease in the rate of tax on interest income may be a desirable tax combination under conditions of revenue neutrality.
2. We explored a desirable public pension system in an aging Japan. The simulation results show that, if we consider a public pension program with the same scale as the current Japanese program, the highest level of social welfare is attained when a public pension system consists of only a basic pension and is financed by a consumption tax.
3. We investigated an optimal rate of the national burden in an aging Japan. The simulation results suggest that an optimal rate for the national burden would rise as Japan ages, and may exceed 50% during a period of rapid aging of its population.
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Report
(5 results)
Research Products
(38 results)
