소득세 격차 비교를 통한 근로소득과세 개선방안 연구

Korea’s current income tax is operated with the progressive structure. The tax burden in such a progressive structure type tax burden is known to demonstrate the function of income redistribution by income bracket. However, upon looking at Korea’s actual income tax burden level, it is very low, compared with major OECD member countries, and the ratio of tax revenue to total taxes is low. The fundamental cause of such a low income tax burden is regarded as stemming from tax support, such as various items’ tax exemption on taxation objects, income deduction, tax reduction, and tax credit. The application of extensive tax support causes a problem sharply decreasing the effective tax rate of income tax, because quite a number of tax payers are converted into the tax exempted, as well as due to low tax burden through tax credit and tax reduction, although many tax subjects remain tax payers. Such a problem on the ratio of the tax exempted, brings about weakening income tax revenue and the income tax redistribution function. In such a situation, the progressive structural function for income redistribution cannot be demonstrated. This study presents implications on Korea’s taxation of earned income tax and a future improvement direction through a comparative analysis on the changes in yearly tax burden, according to wage earners’ income level of major OECD member countries and Korea in relation with such problems of the earned income tax system. As a result of the analysis, the measures to improve are as follows: first, decrease in deduction rate by section of earned income tax deduction. second, deduction mode shift by deduction item or deduction limit adjustment. third, the decrease of standard tax deduction.