Korea Institute of Public Finance
Open Access Repository
- 공공부조, EITC, 세제상인텐시브
- 국민기초생활보장제도의 개선방향
- 김재진; 권오성
- Issue Date
- pp. 280
- The National Minimum Living Standard of Security System (NMLSS), introduced in October of 2000, is a Public Assistance Program that recognizes the people''''s rights to be assured in a minimum living standard regardless of their ability to work. As for other Public Assistance Programs, the NMLSS entails the problem of being abused by the beneficiaries that is meant to protect. In order to encourage labor, the government of advanced countries ismaking it available on dual provisions, such as the Earnings Disregard System within the public aid system and through tax policies that entice the low-income class to work. This is not only important for the continuance of the welfare system, but also for the workers well being since earning income could be the most valuable responsibility of being independent in human being.
In Korea, the application of the Earnings Disregard System is currently limited to students, the disabled, and participants of self-support programs. It has not been carried out for the general beneficiaries, since the deduction method, deduction rate, and its effects have not been socially agreed upon. Even if it becomes effective, we may expect questionable results due to the 90% marginal tax rate, deficiencies in understanding the income infrastructure, payment method of "all-or-nothing," or the lack of public officials that deal exclusively in social welfare. Under such conditions, the need for labor inducement through appropriate tax policies is indispensable.
First, by introducing the EITC System, both the current beneficiaries of the NMLSS and the lower-middle income workers must be actively induced to participate in the labor market. The government''''s assignment for the current beneficiaries would be to secure a minimum standard of living for those incapable of work through the NMLSS, and to encourage work through EITC for those that are able to work in the lower-middle income class.
Second, the opportunities for employment of NMLSS beneficiaries shall be expanded through a presentation of incentives to employers, to overcome the barrier of employment that they presently face. By being offered tax incentives, the employers will be able to disperse the risk of hiring NMLSS recipients, and those employed will be given opportunities to prove their abilities and competitiveness by working enthusiastically for a certain period of time.
- 공공부조, EITC, 세제상인텐시브
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