ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

How to Revise Tax Laws to Promote the Elderly Employment

  • Byung Wook Jun University of Seoul Graduate School of Taxation

Asian Tax Journal Vol. 19 No. 5 (2018), pp. 115-151

Abstract

Reflecting recent population trends and social demands, this study suggests how to provide tax benefits for the companies to hire the eldery employers, and analyzes various economic effects of the tax revision plan. The tax benefits to promote the elderly employment are rendered to the companies to hire the elderly employers, which is similar policy driving tools as in other Western countries and as in other areas of government functions. The underlying logic for the tax benefits is based on the “external economies” which the elderly employment creates such as improving health and relieving social alienation and loneliness. Relatively poor level of policy support for employment as to the elderly can also be regarded as the logic for the tax benefits. The method of the tax benefits, which this study suggests, is that the elderly with the age of 60 and more should be included in the preferred target of the tax credit for employment promotion which has been enforced since 2018. As the preferred target is defined as socially disadvantaged employment groups － youth class, the disabled and job discontinued women, the elderly can also be treated in the same way as those groups considering the equity of tax benefits. In case the tax benefits were actually enforced, the analysis of this study, based on rational assumptions, shows that enough tax revenues to make up for the tax benefits can be estimated and, as a result, the fiscal soundness of the government is expected to be rarely harmed. Moreover, various economic effects, including substantial job creation effect, are also expectable, which strongly coincides with the priority of the government’s economic policies.

Keywords

  • Elderly employment
  • Tax benefits
  • Tax credit for employment promotion
  • Tax revenues effect
  • Job creation effect

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