논문

The purpose of this article is to find optimal revenue sources for the Local
Transfer Fund(LTF) System. In doing so, the study particularly focuses on three
criteria: i.e., the stability and growth characteristics, regional equity in terms of
relativity, and the LTF project linkage of the candidate National Tax items. With
these criteria in mind, this study conducted the statistics and regression
analyses as well as a descriptive analysis for the selection of the most
appropriate revenue sources for the LTF.

The followings are some findings from the results of the analyses.

In terms of the stability and growth characteristics aspects(measured by the tax
revenue elasticity with respect to GDP and the annual growth rate of the
candidate National Tax items), and the degree of a linkage between the tax
characteristics and the LTF projects characteristics, the Transportation Tax
turned out to be most appropriate. Also, from the perspective of the regional
equity in terms of relativity, the Transportation Tax and the Special Consumption
Tax turned out to be most appropriate.

Finally, one should consider the fact that other systems such as the Local
Shared Tax(general grant) and others will be affected when one considers all
other National Tax items as revenue sources for the LTF except the
Transportation Tax.