“The most beautiful choice to save the region”

The metropolitan area is growing larger, while the rural areas are becoming emptier.
The two words expansion and extinction run through our country.
As people, money, and even taxes are sucked into the metropolitan area, small towns are pushed into the landscape of oblivion.
In this reality, how can the phrase "saving the region" gain practical power?

This book, "Beautiful Choices to Revitalize Your Region - Hometown Tax Payment and Hometown Love Donation," confronts this question head-on.
By comparing and analyzing Japan's hometown tax system and Korea's hometown love donation system, we calmly demonstrate how the system can serve as a field for social experimentation.
It emphasizes that it is not simply a device to change the flow of finances, but rather an important source of energy that allows regions to design their own future through the process of citizens making choices and the administration responding.

The most striking thing that comes to mind while reading the book is that the core of the system is not 'money'.
Of course, it is clear that the flow of money must change from what it is now for the region to survive.
But more important than that is the mindset of the citizens behind that choice, and the imagination of the administration and community that translate that mindset into the future of the region.
At that very point, the system transforms from a "way to pay taxes" to a "way to build community."

The authors compare several cases from Japan and Korea to demonstrate both the potential and limitations of the system.
While not ignoring issues like competition for gifts and regional imbalances, we also do not miss the space for autonomous and democratic experimentation that this system provides.
The important thing is that the system does not immediately save the region, but rather opens a new door for citizens to actively participate.

This book, "Beautiful Choices for Revitalizing the Region," serves as a guide for administrators and policymakers to examine the principles of how systems work and provides the inspiration needed to implement policies.
It also presents a new model of social cooperation for corporations and public interest foundations (corporations), and awakens in citizens and local activists a sense of new experimentation that can change the fate of their regions.
Above all, this book makes us rethink the region we live in, not as a simple administrative district, but as a stage for our own lives.

The message this book is trying to convey is clear.
The future of a region depends on its people, not its institutions.
Only when citizens who choose, an administration that responds, and the private sector that adds innovation work together can possibilities truly unfold.
This book is the most reliable guide to take on that path.

Japan was the first country in the world to devise a system called Furusato noze (hometown tax payment) in 2008, and has been implementing it ever since.
This is a system that allows residents of large cities to primarily choose local governments to receive financial support.
To put it simply, it is a system whereby tax-paying residents can deduct the amount minus 2,000 yen from their resident tax by making a 'donation' to their hometown or a local government they wish to support, and can also receive a gift in return from the local government to which they made the donation.

--- p.14

From the perspective that "taxpayers can choose where their taxes are paid and how they are spent," the hometown tax system may be the first model in Japan's tax system to promote "decentralization of tax sovereignty."
In other words, the system of exercising 'taxpayer sovereignty' can be seen as being realized in hometown tax payment, in that citizens can choose the region and purpose of use for at least a portion of the taxes they pay.

--- p.20

The hometown tax system goes beyond simply encouraging donations; it is achieving tangible results in supporting local small businesses and revitalizing the economy by providing gifts featuring local specialties.
Because the success or failure of collecting donations for hometown taxes has a significant impact on securing local government finances and achieving self-reliance, local governments have been focusing their efforts on developing thank-you gifts to ensure the success of their donation collection efforts.
While excessive competition is a problem, it is also true that the development of return gifts has helped revitalize the local economy.

--- p.58

Japan's hometown tax system can be described as a "people-centered" system that helps local producers survive the monopoly of large corporations, encourages residents to participate in local governance, and allows non-local taxpayers to connect with the local community and revitalize the region.
In Japan's hometown tax system, which seems to be immersed in promotional photos of gifts, we can actually find 'people'.

--- p.103

Since local government grants use government budget, there are naturally limitations.
In contrast, hometown taxes have the advantage of being able to be used as a self-sufficient source of revenue for local governments.
Only with these self-financing resources can local governments take responsibility for implementing policies and achieve results.
It is difficult to achieve sustained success with only government support that is like ‘throwing money around’.

--- p.165

Going forward, responding to local crises requires bolder collaborations, including horizontal linkages within the administration, talent sharing, and public-private cooperation, as well as promoting private sector participation.
Rather than focusing on local revitalization led by local government officials, we should pay attention to the Japanese case, where various private entities, regardless of their corporate nature, such as for-profit companies, non-profit corporations, cooperatives, and social enterprises, are participating to implement creative ideas for regional development.

--- p.170

When you get down to the basics, the situation is more dire.
There are over 100 regions with a self-sufficiency rate of less than 10% (as of 2023, Statistics Korea).
Given these circumstances, local governments have long been left to fend for themselves, only looking to the central government.
Whether it is the central or local government, the source of finance is taxes.
The country and local communities are financed with taxes paid by citizens.
However, the national treasury situation is not improving, and local governments are also unable to escape budget constraints.
Couldn't local governments find other ways to fill their financial shortfalls? If they had money they could spend freely without worrying about government pressure, there'd be nothing better.
--- p.174

Tax cuts on donations mean lower tax revenues, which in turn means a smaller budget for expenditures.
This could be a factor that worsens local government finances, given that the vast majority of local governments rely on government support.
Furthermore, if donations are excessively concentrated in certain local governments, the gap between local governments may widen, leading to a phenomenon of the rich getting richer and the poor getting poorer.
Given these anticipated challenges, why did the Japanese government adopt such an unconventional approach? It was likely driven by a sense of desperation: they believed they would not be able to overcome the immediate crisis unless they broke free from familiar, established prescriptions and path dependencies.
This is an attempt to find a new breakthrough through a groundbreaking experiment that ignores the premise.

--- p.182

The goal of the Hometown Love Donation System is to 'collect resources that can be used independently and use them to prevent the extinction of local communities.'
The ultimate goal, or impact, can be described as 'making the region a better place to live.'
To manage and evaluate performance goals, indicators (KPIs)19 are needed, but the government has not presented any standards, and no local government appears to be managing hometown love donations in conjunction with performance indicators.
Since the system has only been implemented for a short time and the amount of fundraising is small, it can be said that management indicators are not necessary.
However, there is a big difference in performance between setting and managing indicators and not.
‘Spending as much as you can’ and ‘setting a purpose and target amount and then raising money’ produce different results.

--- p.199

A look at Japanese local governments that are achieving significant results through hometown tax payments reveals a high level of resident participation, including suggestions for gift ideas and improvements.
There are also many places where residents are voluntarily filling the gap in administrative staff.
This means that real public-private cooperation is taking place, not just formality.
In the Korean context, public-private cooperation is likely to unfold in a manner in which the government takes the lead and the private sector follows.
A paradigm shift is needed.
The starting point of cooperation is trust and faith.
Just as it is impossible to achieve local autonomy without trust in local autonomy, it is difficult to achieve success in anything without trust as a foundation.

--- p.282

The Hometown Tax Payment and Hometown Love Donation System provides tax benefits and rewards in the form of gifts to supporters through the method of 'donation.'
But the way to save a region/province is not through donations alone.
There are always means to allow money to flow into local/regional areas, from banks, currencies, funds, stocks, bonds, and citizen investment platforms.
How these tools are utilized depends on the policy capabilities of the government and local governments.
What matters is not the money itself, but the system that makes the money circulate, and that power comes from the system.
This is why social imagination is needed to create good systems.

--- p.300