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The Political Economy of Tax Reform

The rapid emergence of East Asia as an important geopolitical-economic entity has been one of the most visible and striking changes in the international economy in recent years. With that emergence has come an increased need for understanding the problems of interdependence. As a step toward meeting this need, the National Bureau of Economic Research joined with the Korea Development Institute to sponsor this volume, which focuses on the complexities of tax reform in a global economy.

Experts from Taiwan, Korea, the Philippines, Japan, and Thailand, as well as the United States, Canada, and Israel examine the major tax programs of the 1980s and their domestic and international economic effects. The analyses reveal similarities between the United States and countries in East Asia in political constraints on policy making, and taken together they show how growing interdependence interacts with domestic economic and political concerns to affect issues as politically vital as tax reform. Economists, policymakers, and members of the business community will benefit from these studies.

Table of Contents

Introduction, Takatoshi Ito and Anne O. Krueger
Part I
1. International Interactions between Tax Systems and Capital Flows, Assaf Razin and Efraim Sadka
Comments: Toshihiro Ihori and John Whalley
2. The Role of Taxation in the Development of East Asian Economies, Vito Tanzi and Parthasarathi Shome
Comment: Joseph Y. Lim
Part II
3. Tax Reform in Japan, Masaaki Homma
Comments: Hiromitsu Ishi and Charles E. McLure, Jr.
4. The Political Economy of Tax Reforms and Their Implications for Interdependence: United States, Charles E. McLure, Jr.
5. Tax Reform in Korea, Taewon Kwack and Kye-Sik Lee
6. An Appraisal of Business Tax Reform in Taiwan: The Case of Value-Added Taxation, Chuan Lin
Comments: Ching-huei Chang and Kwang Choi
Part III
7. The Dynamic Efficiency Effect of a Change in the Marginal
Capital Income Tax Rate: The Nakasone-Takeshita Tax Reform Tatsuo Hatta and Hideki Nishioka
Comments: Medhi Krongkaew and Assaf Razin
8. The Role of Tax Policy in Korea’s Economic Growth, Irene Trela and John Whalley
Comments: Anne O. Krueger
9. Aging of Population, Social Security, and Tax Reform, Yukio Noguchi
Comments: Hiromitsu Ishi, Maria S. Gochoco, and, Charles E. McLure, Jr.
10. Bequest Taxes and Accumulation of Household Wealth: U.S.Japan Comparison, Thomas A. Barthold and Takatoshi Ito
Comments: Ching-huei Chang and Hiromitsu Ishi
11. Taxation of Income from Foreign Capital in Korea , Kun-young Yun
Comments: Toshihiro Ihori, Toshiaki Tachibanaki, and Twatchai Yonkittikul
12. Tax Policy and Foreign Direct Investment in Taiwan Ching-huei Chang and Peter W. H. Cheng
Comments: Kwang Choi and Toshihiro Ihori

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