Distributional Effects of Tax Reforms in Japan: Micro-simulation Approach

July 22, 2022

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Format: Chicago

Takuma Hisanaga. Distributional Effects of Tax Reforms in Japan: Micro-simulation Approach, (USA: International Monetary Fund, 2022) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper conducts micro-simulations to study the distributional effects of several tax measures in Japan, considering households’ heterogeneity in terms of both income and wealth. Simulation results suggest that increasing the consumption tax rate and strengthening the recurrent tax on immovable property would weigh more heavily on low-income households with large wealth than on those of comparable incomes with small wealth, and that introduction of a consumption tax credit would be effective in containing a rise in tax burden of low-income households.

Subject: Consumption taxes, Income, National accounts, Personal income tax, Tax allowances, Tax incidence, Tax policy, Taxes

Keywords: Capital income tax tax rate, Consumption tax credit, Consumption taxes, Employment income deduction, Income, Income decile, Inequality, Japan, Micro-simulation, Pension income deduction, Personal income tax, Reform option, Resident tax, Tax allowances, Tax incidence, Tax Policy

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2022/150
Stock No:

WPIEA2022150
ISBN:

9798400214097
ISSN:

1018-5941

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