The macroeconomic effects of basic income funded by a land-holding tax in Korea |
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| Affiliation: | 1. UniSA Business, University of South Australia, GPO Box 2471, Adelaide, South Australia 5001, Australia;2. College of Business, Government & Law, Flinders University, Bedford Park, South Australia 5042, Australia;1. Department of Economics, University of Bern, Switzerland;2. Department of Economic and Social Sciences, Università Politecnica delle Marche, Ancona, Italy;3. Department of Economics and Law, Sapienza University of Rome (Italy) and Department of Economics, University of Antwerp, Belgium;4. Department of Economics and Finance, Luiss Guido Carli, Rome, Italy;1. Western Galilee College, Department of Economics, Israel;2. University College London, Cancer Institute, Department of Cancer Biology, United Kingdom |
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| Abstract: | We examine the macroeconomic effects of the introduction of a scheme to pay a basic income of approximately $900 per year to each citizen through a land-holding tax. Unlike other studies, we address the issue of whether a sharp increase in the land-holding tax rate intended to raise funds for a basic income scheme causes landowners to sell their land. We also use the relationship between holding assets and reservation wages to determine whether household members supply their labor in accordance with the payment of basic income. Our simulation results obtained using data for Korea show that the introduction of the basic income scheme decreases real gross domestic product, total labor demand, and social welfare by 1.3%, 0.3%, and 0.4%, respectively. |
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| Keywords: | Basic income Land-holding tax Macroeconomic effects |
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