"A Theory of Commodity Tax Reform under Revenue Constraint"

Despite the development of the optimal taxation theory , few of the practicing tax economists question the traditional wisdom that making tax rates flat will lead to a more efficient tax system. Practicing tax economists seem to have an intuition that even if the uniform tax structure may not be the most efficient, it may be a close approximation. The present paper survey the literature that provides theoretical under-pinnings for the practitioner's intuition. Also, the paper simplifies the statements and proofs of theorems in literature.

"A Theory of Optimal Tariffs under a Revenue Constraint"

This paper examines the optimal tariff structure under a revenue constraint. When a fixed level of tax revenue has to be collected from the tariff alone, no adjustment in tariff rates can achieve an efficient resource allocation, even in a small open economy. Hence, the optimal tariff problem arises under a revenue constraint. We show that the revenue-constrained optimal tariff structure is characterized by the following two rules: (i) the optimal tariff rate is lower for the import good that is a closer substitute for the export good; and (ii) the stronger the cross-substitutability between imports, the closer the optimal tariff is to uniformity. This theoretically explains why empirical studies have shown that the efficiency loss from a uniform tariff structure is negligible.

Settlement Between Electric Transmission Companies under the Point of Connection Tariff or "Postal Stamp" System (Japanese)

This paper discusses how an electric transmission company in a pass-through area should settle the cost of a pass-through with the neighboring transmission companies under the point-of-connection tariff system. First, the paper shows that if the cost of the pass-through is settled based on the principle that determines the (metered) power transmission fares for ordinary customers (i.e. injectors and withdrawers) of the transmission companies, the fare receipts of the pass-through transmission company can be made to match its power transmission losses. The paper also demonstrates that this method minimizes power transmission losses from a nationwide perspective. In addition, the paper shows that incentives will be given to construction of the transmission line in the pass-through area if the transmission company in the pass-through area charges its neighboring transmission companies the same basic rates (as opposed to the metered transmission fare) that ordinary injectors and withdrawers face. This structure of a basic rate sets higher injection rates and lower withdrawal rates in upstream areas than in downstream areas. The revenue from this basic rates structure can bear the burden of construction costs of transmission lines in the pass-through areas. Incidentally, this finding justifies the structure of basic rates practiced in Nordic countries.

Aging, Saving, and Public Pensions in Japan

We analyze the impact of population aging on Japan's household saving rate and on its public pension system and the impact of that system on Japan's household saving rate and obtain the following results: first, the age structure of Japan's population can explain the level of, and past and future trends in, its household saving rate; second, the rapid aging of Japan's population is causing Japan's household saving rate to decline and this decline can be expected to continue; third, the pay-as-you-go nature of the public pension system, combined with rapid population aging, created considerable intergenerational inequities and increased the saving rates of cohorts born after 1965, which in turn slowed the decline in Japan's household saving rate; and fourth, the 2004 public pension reform alleviated the intergenerational inequities of Japan's public pension system somewhat but will in the long run exacerbate the downward trend in Japan's household saving rate.

Aging, Saving, and Public Pensions in Japan

We analyze the impact of population aging on Japan's household saving rate and on its public pension system and the impact of that system on Japan's household saving rate and obtain the following results: first, the age structure of Japan's population can explain the level of, and past and future trends in, its household saving rate; second, the rapid aging of Japan's population is causing Japan's household saving rate to decline and this decline can be expected to continue; third, the pay-as-you-go nature of the public pension system, combined with rapid population aging, created considerable intergenerational inequities and increased the saving rates of cohorts born after 1965, which in turn slowed the decline in Japan's household saving rate; and fourth, the 2004 public pension reform alleviated the intergenerational inequities of Japan's public pension system somewhat but will in the long run exacerbate the downward trend in Japan's household saving rate.