논문

The fiscal relationship between the central and local governments indicates that
the central government dominates in terms of tax revenues. The allocation of
taxing authority and tax bases are specified in the Local Tax Law, which is
established by the central government. Income taxes and consumption taxes,
which are considered stable revenue sources and elastic, are assigned to the
central government. On the other hand, most local taxes correspond to property
taxes. This tax assignment creates fiscal centralization and is considered as a
barrier to local autonomy. Regional differences in economic base and activity,
resulting from partial economic development, incur fiscal disparities among local
governments.

In this background, the purpose of this paper is to study the reassignment of tax
sources between national tax and local tax for the expansion of local finance.
The results of this study are as follows: First, the functional distribution and the
reallocation of work should be considered to make the fiscal relationship
between the national and local government. Secondly, the redistribution of tax
bases and fair fiscal burden corresponding to function carried by each level of
government should be considered. Third, the central government should minimize
control to help local governments secure fiscal autonomy. At the same time, local
governments themselves should be able to enhance their problem-solving
capacity. Thus, the tax sources between national tax and local tax should be
reassigned for the expansion of local finance. The alternatives are the
introduction of local consumption tax and local income tax.