지방소비세 도입의 재원배분 효과 분석

The objective of this paper is to analyze the reallocation of local fiscal revenues through the newly introduced the local consumption tax (LCT) in order to identify its effect on the local fiscal behavior. Based on both theoretical and numerical analysis, the main findings of the analysis are as follows. Firstly, the revenues of all types of local governments increase with the LCT. Secondly, the one unit increase in LCT revenue results in less than one unit increase in local revenues because it decreases the amount of equalization grant allocated by the central government. Thirdly, the local governments with the higher fiscal deficiencies experience the greater increase in revenues with the LCT. Finally, the reallocation effect of LCT is found to be surprisingly the same as that of local share tax. In addition to the fact that local discretion on the LCT's tax rate is not allowed, the findings suggest that LCT is not a local tax but a type of fiscal equalization grant. Along with the recent discussion on the excessive fiscal equalization performed by the central government, this type of LCT would provoke an undesirable influence on the local fiscal behavior.