Tax Design For Inclusive Growth
Asian Tax Journal Vol. 21 No. 1 (2020), pp. 65-87
Abstract
This paper studies the tax policy design for inclusive economic growth. Inclusive growth can be defined as economic growth which delivers progress to society as a whole. The basic idea of inclusive growth is that systematic inequality of opportunity “toxic” as it will derail the growth process through political channels or conflict. So the inclusive growth takes a long term perspective growth by focusing on productive employment rather than an direct income distribution. Even though the concept of inclusive growth can be controversial, it has become an alternative government economy policy direction after 2008 financial crisis in many countries. This study suggests tree points for applying the inclusive growth concept to tax policy. First, it would be better to hire inclusive growth concepts as our core philosophy for tax policy design. Ironically, we don’t have proper conceptual framework for our tax structure yet, while the tax is the critical issue of social contract. We should try to suggest elaborate frames(for example, strategy map) to the taxpayers for their agreements. In that sense, inclusive growth will provide a macro perspective for the relevance of tax structure and make it neat and trim. Second, we would better adopt BSC(Balanced Scorecard) concepts －just like critical success factor or key performance indicator－ to implement the inclusive growth in real world successfully. BSC is composed of financial measure, customer measure, internal－business－process measure, learning and growth measure in the company level. The measures have both cause－and－effect linkage and individual values just like the inclusive growth strategic goals. So BSC can be a good reference to making a better modeling of tax policy design. Last, this research suggests tax portfolio concept and evaluation system. Conventional disputes over tax usually have been remained at the level of the individual taxes. The tax portfolio may be characterized by allocating across categories(eg. corporate tax, income tax etc). The idea is balance the portfolio in the sense of inclusive growth. We can make numerous tax portfolio options and evaluate them in various criteria. In that phase, RAND’s Portfolio Analysis Tool(PAT) can be a good tool. PAT is designed to facilitate strategic portfolio analysis dealing with both uncertainty and differences of perspective.
Keywords
- Inclusive Growth
- Tax Design
- Tax Policy Design
- Balanced Scorecard
- Portfolio Analysis Tool
Related Articles
The Effect of Innovation Performance on Financial Analyst Forecasts in KOSDAQ
25(1) 107-128
Firm Risk in Audit Report and Tax Avoidance：Focusing on the Role of Financial Analysts
24(2) 117-153
Tax Policy Trends and Evaluation in Response to COVID－19
23(1) 97-119
Tax Avoidance and Corporate Transparency
20(2) 95-123
Problems and Recommendations for Government Performance Evaluation on Taxation Policy
18(6) 285-309