The Korea Local Administration Review

This paper is tying to analyze the effect of the elastic tax rate on the ordinary localshared tax. The ordinary shared tax is the gap between the reference amount of financialdemand and the reference amount of financial revenue. And the reference amount offinancial revenue consists of the basic revenue, the amended revenue, and the self-effortrevenue. A tax rate increase on some of tax items have the elastic tax rate can affectthe amended revenue and the self-effort revenue. In the case of the regional resourcesfacilities tax and the residence part in the resident tax, the increase of tax rate bringsthe change of the amended revenue and the self-effort revenue in estimating the ordinarylocal shared tax. And the tax rate of the regional resources facilities tax is changeablein the range of -50% to 50% of standard tax rate but that of the resident part inthe resident tax is flexible within the 10 thousand won.The results of the analysis show that if the individual local government raises taxrate tax of tax items have the elastic tax rate, the amended revenue increases andthe reference amount of financial revenue. It makes the ordinary shared tax decrease.By the way, the increase of tax rate on the regional resources facilities tax and theresidence part in the resident tax gives rise to the decrease of the self-effort revenue.In this case, the decrease of the reference amount of financial revenue by the decreaseof the self-effort revenue is likely to be greater than the increase of the referenceamount of financial revenue by the increase of the amended revenue. It means thatthe ordinary shared tax increases because of the increase of the tax rate on the regionalresources facilities tax and the residence part in the resident tax.
□ Keywords: elastic tax rate, ordinary local shared tax, reference amount offinancial revenue