The Empirical Study of Excess Burden of Taiwan Business Tax

• Main Author: 蔡幸珠
• Other Authors: 林恭正
• Format: Others
• Language: zh-TW
• Published: 2001
• Online Access: http://ndltd.ncl.edu.tw/handle/86009532073188196176

碩士 === 逢甲大學 === 會計與財稅研究所 === 89 === A tax policy should consider the tax-induced administrative costs as well as the social welfare costs (or excess burden) in the aspect of efficiency. Abundant empirical studies focus on the estimation of excess burden induced by the income tax. However, the studies focusing on the estimation of excess burden induced by the consumption tax are relatively few. Yet, none of the studies are found in estimating domestic excess burden induced by the consumption tax. The purpose of this study is to construct an extended linear expenditure system (ELES) demand model, by using 1998 Taiwan household survey data, to estimate the excess burden of Taiwan business tax. Both the exact method and the second-order Taylor series approximation (SOAs) method are used to calculate the (marginal) excess burden of 1998 Taiwan business tax. Two main results are concluded: (1) Different methods yield significantly different outcomes. The estimated excess burden values of the SOAs method are likely much smaller than that of the exact method. (2) Based on the definition of equivalent variation and under the current nominal 5 percent tax rate, the average excess burden for a dollar tax revenue collected is $0.3515 when using the exact method. Whereas, by using the SOAs method, the marginal excess burden is $0.0043. The later figure is close to the previous study on the estimation of Taiwan individual income tax.