Income Distribution and Tax Policy in Taiwan

• Main Authors: Ling-yu Tsai, 蔡玲玉
• Other Authors: Kung-cheng Lin
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/44996508892386538508

碩士 === 逢甲大學 === 財稅所 === 96 === The equity of income distribution has been the attention issue of the public. The studies related to the equality of Taiwan income distribution are a lot. However, these studies only evaluated a specific year or for a few specified years. In order to get better understanding of the trend of Taiwan income distribution, this study employed more than 31 years historical time series data. Furthermore, this study tries to explain the historical relationship between income distribution and tax policies in Taiwan. This study, based on the 1976 to 2006 data of National Surveys of Family Revenue and Expenditure of Taiwan, examined the change of the income distribution before and after taxation through the indexes of income gap, income share, and average effective tax rate. We evaluated the effects of individual comprehensive income tax, property tax, other taxes, and the total tax burden on these indexes. The results indicate that, first, the income inequality became more seriously in every index. Second, the trend of wage equality showed positive significantly relation with income equality. Third, fiscal and economic policies showed significant impact on before-tax income distribution. Fourth, historical data showed that individual comprehensive income tax plays the most important role on income equality and it became more and more important after 1994. However, other taxes had the least effect on the equality of income distribution. Sometimes, other taxes may even induce the inequality of income distribution. Finally, the equality effect of individual comprehensive income tax for the top 1% level of income is the most significant and this might coordinate with the principle of ability to pay. The trend of the average effective tax rate of property tax declines every year and the function of equalization reduced. For other taxes, the equalization effect is not significant and, sometimes, it may induce the effect of inequality. The index of the total tax burden presented the effect of equalization, however, its effect was less significant than the effect of individual comprehensive income tax.