Simulating progressive expenditure taxation in an aging Japan

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Abstract

This paper investigates the quantitative effects of tax reform from progressive labor income taxation toward progressive expenditure taxation on efficiency and equity in Japan, a society with an aging population. To analyze this problem, we employ a comparative steady state simulation approach for an extended life-cycle general equilibrium model of overlapping generations with different lifetime earnings ability. The simulation results suggest some advantages of a new tax system of progressive expenditure taxation.

Original languageEnglish
Pages (from-to)309-325
Number of pages17
JournalJournal of Policy Modeling
Volume27
Issue number3
DOIs
Publication statusPublished - Apr 2005

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Keywords

  • Aging population
  • Life-cycle general equilibrium model
  • Progressive expenditure tax
  • Simulation analysis
  • Tax reform

ASJC Scopus subject areas

  • Economics and Econometrics

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