• Title, Summary, Keyword: Optimal Income Taxes

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Optimal Income Tax Rates for the Korean Economy

  • CHANG, YONGSUNG;KIM, SUN-BIN;CHANG, BO HYUN
    • KDI Journal of Economic Policy
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    • v.37 no.3
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    • pp.1-30
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    • 2015
  • Based on a quantitative, heterogeneous agent general equilibrium model, we compute the optimal tax rates for labor and capital incomes for the Korean economy. According to our model, a more progressive income tax schedule along with a higher capital tax rate can increase average welfare by as much as 0.86% of permanent consumption. Approximately 64% of house-holds, those with low assets and low productivity, are better off when a more progressive optimal tax schedule is adopted. Despite the potentially significant welfare gains, our calculation should be interpreted with caution because our benchmark model does not take into account possible capital outflows or the increased administrative costs associated with high taxes.

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The Optimal Environmental Tax Rates in the Generalized Utilitarian Social Welfare Function (일반적인 사회후생함수 모형에서의 최적환경세 추정에 관한 연구)

  • Lho, Sangwhan
    • Environmental and Resource Economics Review
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    • v.11 no.4
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    • pp.689-706
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    • 2002
  • This paper makes some contributions on optimal environmental taxes in the generalized utilitarian social welfare function. It is not to suggest as to appropriate environmental tax rates but to contribute the direction of environmental tax policy. The tax rates depend on parameters of individual utility function (CES utility function) and social welfare function and income tax rate. The major findings are that, as the elasticity of substitution between labor and leisure and the concavity of social welfare function increase, both the optimal tax rates and the government demogrants rise. And, as the parameter of environmental pollution in the individual utility function increases, the optimal tax rates also increase. For the future study, this model involves the income tax and the capital tax as endogenous variables and the wage changes due to international trade.

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Bioeconomic Management Policy for Fisheries Resources (생물경제학적 어업자원 관리정책에 관한 연구)

  • PYO, Hee-Dong;KWON, Suk-jae
    • Journal of Fisheries and Marine Sciences Education
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    • v.16 no.1
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    • pp.84-98
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    • 2004
  • Due to a publicly owned resources, the overexploitation of the fisheries resources can result in externalities in the form of reduced future levels of yield. These problems can be theoretically improved through effective management of the fishery. The paper illustrates maximum sustainable yield(MSY), maximum economic yield(MEY) and F0.1 level of fishing mortality as the concept of optimal yield, and it theoretically shows that MSY is more appropriate for the optimal yield than MEY where prices increase even though MEY achieves the maximization of economic rent in a fishery assuming constant prices. And the paper presents several fisheries management tools and policies such as input controls, output controls and taxes. As the traditional approach to fishery management, input controls involve restrictions on the physical inputs into the production process(e.g. capital, time or technology) and output controls involve limits on the quantity of fish that can be landed. To introduce user cost into the harvest decisions of rent-seeking fishers, taxation, as a bioeconomic management policy of the fisheries, directly addresses the problems associated with the resource being unpriced. As most fisheries management plans, however, have increasing fisher income as an objective, taxes have not been introduced into any fisheries management policies despite their theoretical attraction.

Optimal Design of Process-Inventory Network Considering Exchange Rates and Taxes in Multinational Corporations (다국적 기업에서 환율과 세금을 고려한 공정-저장조 망구조의 최적설계)

  • Yi, Gyeong-Beom;Suh, Kuen-Hack
    • Journal of Institute of Control, Robotics and Systems
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    • v.17 no.9
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    • pp.932-940
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    • 2011
  • This paper presents an integrated analysis of supply chain and financing decisions of multi-national corporation. We construct a model in which multiple currency storage units are installed to manage the currency flows associated with multi-national supply chain activities such as raw material procurement, process operation, inventory control, transportation and finished product sales. Core contribution of this study is to quantitatively investigate the influence of macroscopic economic factors such as exchange rates and taxes on operational decisions. The supply chain is modeled by the Process-Storage Network with recycle streams. The objective function of the optimization is minimizing the opportunity costs of annualized capital investments and currency/material inventories minus the benefit to stockholders interpreted by home currency. The major constraints of the optimization are that the material and currency storage units must not be depleted. A production and inventory analysis formulation, the periodic square wave (PSW) model, provides useful expressions for the upper/lower bounds and average levels of the currency and material inventory holdups. The expressions for the Kuhn-Tucker conditions of the optimization problem are reduced to a subproblem and analytical lot sizing equations. The procurement, production, transportation and financial transaction lot sizes can be determined by analytical expressions after the average flow rates are already known. We show that, when corporate income tax is taken into consideration, the optimal production lot and storage sizes are smaller than is the case when such factors are not considered typically by 20 %.

Optimal Design of Multiperiod Process-Inventory Network Considering Transportation Processes (수송공정을 고려한 다분기 공정-저장조 망구조의 최적설계)

  • Suh, Kuen-Hack;Yi, Gyeong-Beom
    • Journal of Institute of Control, Robotics and Systems
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    • v.18 no.9
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    • pp.854-862
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    • 2012
  • The optimal design of batch-storage network by using periodic square wave model provides analytical lot sizing equations for a complex supply chain network characterized as multi-supplier, multi-product, multi-stage, non-serial, multi-customer, cyclic system including recycling and/or remanufacturing. The network structure includes multiple currency flows as well as material flows. The processes are represented by multiple feedstock/product materials with fixed composition which are very suitable for production processes. In this study, transportation processes that carry multiple materials with unknown composition are added and the time frame is changed from single period into multiple periods in order to represent nonperiodic parameter variations. The objective function of the optimization involves minimizing the opportunity costs of annualized capital investments and currency/material inventories minus the benefit to stockholders in the numeraire currency. The expressions for the Kuhn-Tucker conditions of the optimization problem are reduced to a multiperiod subproblem for average flow rates and analytical lot-sizing equations. The multiperiod lot sizing equations are different from single period ones. The effects of corporate income taxes, interest rates and exchange rates are incorporated.