The Effect of Tax Policy Choices on the Labor Market on the Perspective of Global Governance

Tax policy transition plays a very important part in global governance, not only for the public operation or social equity, but also for the labor market which is firmly related with social welfare. On the other hand, unemployment has become a serious problem in 2008. Our research focused on the influence of different tax policies on the adjustment of unemployment, and the transition between direct and indirect taxation. This paper starts with conceptual discussion of the theoretical mathematical model and empirical analysis, and finally policy suggestion. Our conclusion varies due to the initial tax policy, but briefly we suggest that direct tax is more beneficial in the job market than indirect tax.