The Korea Local Administration Review

This study analyzes the effect on the horizontal fiscal equity of the sharedproperty tax system(revenue sharing) initiated by Seoul Municipal Governmentsince 2008 with respect to two distinguished points; first, it compares the equalallocation method of the shared property tax revenue in progress with otherallocation methods(the financial power index, the population size index, andmixed index), second, it takes into account the service supply cost differentialsamong 25 autonomous districts. Analysis shows that 1) the shared property taxsystem in Seoul has contributed to the decrease in horizontal fiscal disparitybut the effect size is a pretty modest rather than significant, and 2) a allocationmethod by the financial power seems better than the current equal allocationmethod.
□ Keywords: shared property tax system, fiscal equity, supply cost, allocationmethod