Japan's Corporate Income Tax: Facts, Issues and Reform Options

Mooij, Ruud de; Saito, Ikuo

doi:10.2139/ssrn.2487896

Cited by 4 publications

(3 citation statements)

References 37 publications

(43 reference statements)

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“…Existing studies explain these differences by referring to the mediating role of domestic political institutions and partisan politics (Park 2022;Hallerberg and Basinger 1998;Swank 2016). Finally, in Japan, consumption tax burdens expanded moderately following the introduction of a 3 percent VAT in 1989, with a gradual increase up to 10 percent in 2019 (De Mooij and Saito 2014;Ishi 2001;Kamikawa 2016, 41-42;Nippon Times 2019).…”

Section: New Tax Models Since the 2000smentioning

confidence: 99%

“…Ideally, progressivity can be measured by considering all diverse tax payments across different economic groups (Piketty and Saez 2007;Prasad and Deng 2009;Saez and Zucman 2019). Given the difficulty of producing such extensive tax data across countries, Japanese and Korean studies have instead focused on certain progressive tax categories, such as personal and corporate income taxes, and analyzed their statutory or marginal rates across different income groups and countries (Choi et al 1991;De Mooij and Saito 2014, 5-7; Dewit and Steinmo 2002, 163; Dalsgaard and Kawagoe 2000, 41;Dalsgaard 2000, 42, 51, 54;Ide and Steinmo 2009, 130;Kim 2009, 208;Kim, M.-K. 2018, 274). While this approach appears practical from a comparative perspective, its narrow focus on progressive taxes has resulted in an uncomprehensive assessment of the overall progressivity of taxation.…”

Section: Measuring the Tax Structurementioning

confidence: 99%

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The Tax Models in Japan and Korea: Concepts and Evidence from a Comparative Perspective

Park

2022

J. East Asian Stud.

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Existing studies have relied on the notion of developmentalism to explain key aspects of the tax policies in Japan and Korea. However, limited efforts have been made to explore these cases from a comparative perspective based on relevant evidence. Far fewer studies have been conducted for examining the contemporary evolution of the tax policies following major reforms since the 1990s. This article seeks to fill these gaps in the research. Employing an analytic framework of tax structure, it provides key definitions of the old and new tax models in Japan and Korea in a way that is comparable with other OECD cases. “Residualism” and “constrained activism,” two heuristic models drawn from low-tax OECD countries, provide useful references for this comparative task. To validate key assessments, the author utilizes and replicates extensive tax data that operationalize important aspects of the tax structure from the 1980s to 2018.

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Section: New Tax Models Since the 2000smentioning

confidence: 99%

Section: Measuring the Tax Structurementioning

confidence: 99%

The Tax Models in Japan and Korea: Concepts and Evidence from a Comparative Perspective

Park

2022

J. East Asian Stud.

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“…Corporate income tax (CIT) reform could stimulate incentives to invest (Hassett and Hubbard, 2002). De Mooij and Saito (2014) find that investment could increase by about 0.4 percent for each point of corporate income tax rate reduction based on international and Japan-specific empirical estimates of corporate tax elasticities. However, they also noted that such rate reduction must be part of a more comprehensive fiscal reform as a CIT rate cut is not self financing and the Japanese government faces tight fiscal constraints.…”

Section: Policy Implicationmentioning

confidence: 99%

Balance Sheet Repair and Corporate Investment in Japan

Kang

2014

IMF Working Papers

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We trace Japanese firms' behavior over the last decades using aggregate corporate balance sheet data. Financial health of Japanese corporate sector has improved and firms paid back significant amount of debt and rebuilt their liquidity buffers. They also expanded abroad while the pace of corporate investment moderated. Regarding the latter, model estimates on aggregate corporate investment over the post bubble period show that expectation about future profitability, in particular medium-term demand outlook, has been the major driver, implying that a successful implementation of structural reforms could have positive impact even in the near term by improving the medium-term demand outlook.

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Lowering the Marginal Corporate Tax Rate: Why the Debate?

Anguelov

2017

Economic Affairs

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This paper as the co-winner of the 2015 second annual Amartya Sen Prize Competition given by the Global Justice Program at Yale University in partnership with Global Financial Integrity and Academics Stand Against Poverty http://globaljustice.macmillan.yale.edu/news/winners-second-amartya-sen-prizeannounced. Abstract:In an effort to attract new investors and retain existing producers, governments use corporate tax rates as a policy tool for industrial recruitment, resulting in interstate tax competition. FDI and GDP growth are the two policy outcomes gauged in interstate tax competition. The assumption is that lower corporate taxes lead to increase in FDI, which results in capital formation that creates GDP growth. This 60-nation panel study tests that assumption through examining economic indicators continent on taxation, such as FDI and MNC mergers and acquisitions between 1999 and 2009. The results suggest that reduced corporate tax rates can increase FDI but decrease annual GDP growth. The main policy implication is that tax competition may attract investment, but may not promote overall economic growth, offering support for value-extraction theories.

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Japan's Corporate Income Tax: Facts, Issues and Reform Options

Cited by 4 publications

References 37 publications

The Tax Models in Japan and Korea: Concepts and Evidence from a Comparative Perspective

The Tax Models in Japan and Korea: Concepts and Evidence from a Comparative Perspective

Balance Sheet Repair and Corporate Investment in Japan

Lowering the Marginal Corporate Tax Rate: Why the Debate?

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