Tax proceeds are critical to welfare.

This study identifies determinants of fiscal sustainability of the welfare state by focusing on tax structure. As confirmed by the results of the study, it is essential to secure financial resources to maintain the welfare state. In the short term, fiscal space may not drive the expansion of welfare expenditures, but it nonetheless leads to this in the medium-to-long term. The problem is that an increase in welfare spending may worsen fiscal sustainability, and it is not always an appropriate solution to reduce welfare expenditures in order to increase fiscal space, which is in keeping with the arguments of welfare state opponents. It is impossible to cut welfare spending thoughtlessly because many social problems should be addressed through collaborative social efforts, and it is also not a suitable alternative to increase welfare spending indefinitely while worsening fiscal space because this may over time dismantle the financial base of the welfare state. It is therefore important to seek ways to maintain welfare spending while ensuring fiscal sustainability. As can be seen from the analysis results, the level of tax burden is an important aspect of fiscal sustainability in the welfare state. Tax revenue is the funded basis for maintaining the welfare state, so increasing tax compliance to offset the negative impact of increasing welfare spending will promote social cohesion. However, the national financial effort to maintain the welfare represents more than collecting additional taxes. The excessive burden does not always have a positive impact on fiscal sustainability, and it is not always possible for a country to collect more tax revenues to expand welfare. Thus, the most important aspect of total tax revenue that should be considered is the manner in which tax revenue is raised because depending on which method is adopted, the impact of taxation on the sustainability of economic, political, and social dimensions varies. As indicated in this study, it appears that securing tax fairness contributes to the fiscal sustainability of the welfare state.