ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

A Comparison of Korean Taxation System with That of the United States of America : Focusing upon Local Taxation System

  • Kyung-Kyu Kang Department of Business Administration, Myongji University

Asian Tax Journal Vol. 1 No. 1 (2000)

Abstract

With the election of the presidents of the local assemblies, Korean local governments started to govern their local affairs by themselves in 1995. Residents can be served better by local self governments than national government. Local self governments need sufficient revenue(funds) to operate properly. But most of Korean local self governments which have been newly formed cannot meet their needs for funds. For local self governments, it is helpful to study and improve taxation system which offers almost all the revenue(funds) for local governments. In this paper I have compared the Korean local taxation system with that of the United States of America, which is typically decentralized . Mainly I compared the structural aspects of local taxation systems of the two countries and suggested to introduce some part of the local taxation systems of the United States of America into the Korean system. Suggestions are as follows: In the short term, ① some kind of the national taxes must be transferred to local ones. ② current local finance balancing schemes must be reorganized. ③ unconditional grant should be allocated to fundmental local self governments through great-sphere ones instead of being allocated by national government. In the long run, ① it is desirable that the Korean taxation system should be transformed to a tax sharing system similar to the one operated in Germany or a tax overlapping system like in the United States of America. and ② local governments are granted the power to tax.

Keywords

  • Local Self Government
  • Taxation System
  • Local Tax

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Asian Tax Journal

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