논문

It is argued that the current structure of Korean local tax system has been designed to support the national development planning policy prevailed in the 60s and 70s. A salient feature of such system is that the tax bases of the national and local governments are strictly separated so that the national government takes precedence over major tax bases such as income and consumption. This paper argues that such system lacks flexibility in handling problems faced by diversified and independent local governments in the 90s. As a solution, it is suggested that old laws preventing tax-sharing be scrapped and the national and local governments share the income and consumption tax base.