A paper published in the Ministry of Finance Policy Research Institute's "Financial Review" Issue 160. Professor Shigeki Kunieda of Chuo University comprehensively discusses the significance and potential of economic analysis using tax data in Japan from theoretical and empirical perspectives.
Key Points
1. Research Background and Objectives
- Author: Shigeki Kunieda (Professor, Faculty of Law, Chuo University)
- Problem Awareness: Japan's lag in tax data utilization and the necessity to overcome it
- Research Purpose: Clarifying the academic and policy significance of tax data analysis
- Approach: Bridging theoretical and empirical research
2. Background of Administrative Data Use in Economics
- International Trends:
- Arrival of the big data era
- Dramatic improvement in computational capacity
- Development of causal inference methods
- Changes in Economics:
- Increased emphasis on empirical research
- Mainstreaming of micro data analysis
- Growing interest in policy evaluation
- Data Revolution: Shift from survey data to administrative data
3. Development of Modern Tax Theory and Empirical Research Using Tax Data
- Evolution of Optimal Taxation Theory:
- Theoretical deepening since Mirrlees
- Introduction of behavioral economic elements
- Development of dynamic optimal taxation
- Necessity of Empirical Research:
- Estimation of theoretical parameters
- Verification of policy effects
- Validation of theoretical predictions
- Interaction Between Theory and Empirics: Gaining new theoretical insights
4. Academic Use of Tax Data in Various Countries
- Advanced Cases:
- Denmark: Integrated data covering entire population
- Norway: Construction of long-term panel data
- USA: Comprehensive data provision by IRS-SOI division
- Institutional Innovations:
- Establishment of data labs
- Remote access systems
- Utilization of synthetic data
- Research Outcomes: Numerous achievements including Nobel Prize-level research
5. Previous Research in Japan and Its Limitations: Example of High-Income Earner Income Distribution Estimation
- Limitations of Existing Research:
- Dependence on aggregate data
- Sample representativeness issues
- Lack of high-income earner data
- Specific Example: Income Inequality Research:
- Limitations of household surveys
- Partial use of tax statistics
- Difficulty in international comparisons
- Data Access Barriers: Conflict between confidentiality obligations and research use
6. Initiation of Joint Research with Tax College and Provided Filing Income Tax Data
- Groundbreaking Progress:
- Start of joint research from 2017
- Realization of access to individual data
- Analysis under strict information management
- Data Characteristics:
- Complete filing income tax data
- Detailed income item information
- Complete grasp of deductions and tax amounts
- Analysis Environment: Secure on-site analysis system
7. Results of Filing Income Tax Data Use: Recent Analysis of High-Income Earner Income Distribution
- New Discoveries:
- Accurate measurement of income concentration
- Changes in income source composition
- Creation of internationally comparable data
- Methodological Contributions:
- Resolution of top-coding problems
- Fitting of Pareto distributions
- Refinement of time series comparisons
- Policy Implications: Concrete suggestions for progressive tax system design
8. Future Prospects for Filing Income Tax Analysis
- Research Expansion:
- Integration with other tax data
- Promotion of panel data creation
- Development of international collaborative research
- New Research Themes:
- Precise estimation of behavioral responses
- Analysis of tax avoidance behavior
- Empirical design of optimal taxation
- Social Contribution: Evidence-based tax reform
This paper theoretically and empirically clarifies the significance of economic analysis using tax data in Japan, persuasively demonstrating the great potential of research in this field.