The Impact of Marginal Tax Reforms on the Supply of Health Related Services in Japan
AbstractThis paper presents a computable general equilibrium (CGE) framework to numerically examine the effect of marginal tax reforms on the supply side of health related sectors. The generalized framework with the latest Japanese input-output table of year 2005 with 108 different production sectors provides the following results: An expansion of subsidies to the hospital sector creates the largest welfare gain when the government does not take into account its financing explicitly. The effect of such a policy on economic efficiency is more than ten times as much as the cost. However, such an expansion policy does necessarily not eventuate in the largest gain anymore if the government considers its balanced budget. The reduction of subsidies to the hospital sector reversely results in the largest welfare gain if the government uses its surplus induced by the reduction of subsidies, in order to decrease the tax imposed on the social welfare sector. Furthermore, if the hospital sector is compensated by lump-sum trasfers when its net subsidy rate is reduced, then a welfare gain could become larger. If the govenment uses its surplus not only for the reduction of the net tax rate of the social welfare sector but also for lump-sum transfers to the hospital sector in order to keep its income unchanged, then a larger welfare gain would be obtained, even if the government implements a balanced budget policy. This implies that a welfare enhancing tax reform within health related sectors is plausible as long as the net subsidy rate of the hospital sector can be reduced. Such a reform does not create any new government deficits either.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2011_19.
Length: 50 pages
Date of creation: Sep 2011
Date of revision:
Contact details of provider:
Postal: 777 Kokusai-cho, Minami Uonuma0-shi, Niigata 949-7277 JAPAN
Web page: http://www.iuj.ac.jp/research/
More information through EDIRC
Computable General Equilibrium (CGE) Model; Marignal Tax Reform; Health Sectors; Taxation; Subsidy; Simulation;
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-15 (All new papers)
- NEP-CMP-2011-10-15 (Computational Economics)
- NEP-HEA-2011-10-15 (Health Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kato, Ryuta, 1998. "Transition to an Aging Japan: Public Pension, Savings, and Capital Taxation," Journal of the Japanese and International Economies, Elsevier, vol. 12(3), pages 204-231, September.
- Shoven,John B. & Whalley,John, 1992.
"Applying General Equilibrium,"
Cambridge University Press, number 9780521319867, Fall.
- Toshihiro Ihori & Ryuta Ray Kato & Masumi Kawade & Shun-ichiro Bessho, 2005.
"Public Debt and Economic Growth in an Aging Japan,"
CIRJE-F-372, CIRJE, Faculty of Economics, University of Tokyo.
- Toshihiro Ihori & Ryuta Ray Kato & Masumi Kawade & Shun-ichiro Bessho, 2005. "Public Debt and Economic Growth in an Aging Japan," CARF F-Series CARF-F-046, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
- Toshihiro Ihori & Ryuta Ray Kato & Masumi Kawade & Shun-ichiro Bessho, 2006. "Public Debt and Economic Growth in an Aging Japan," Working Papers EMS_2006_11, Research Institute, International University of Japan.
- Scarf,Herbert E. & Shoven,John B., 2008. "Applied General Equilibrium Analysis," Cambridge Books, Cambridge University Press, number 9780521070935, Fall.
- Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "Introduction to "A General Equilibrium Model for Tax Policy Evaluation"," NBER Chapters, in: A General Equilibrium Model for Tax Policy Evaluation, pages 1-5 National Bureau of Economic Research, Inc.
- Ballard, Charles L. & Fullerton, Don & Shoven, John B. & Whalley, John, 2009.
"A General Equilibrium Model for Tax Policy Evaluation,"
National Bureau of Economic Research Books,
University of Chicago Press,
edition 0, number 9780226036335, October.
- Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "A General Equilibrium Model for Tax Policy Evaluation," NBER Books, National Bureau of Economic Research, Inc, number ball85-1.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kazumi Imai, Office of Academic Affairs).
If references are entirely missing, you can add them using this form.