In Korea, it has been pointed out that tax burden is not equitable between taxpayers. Especially, many people agree that tax burden is seriously inequitable between earned income and business income. Taking this point into account, we reviewed existing literatures about the actual practice of taxing earned income and business income, and suggested some remedies for improving equity of tax burden between earned income and business income. According to the existing literatures, taxpayers think that the tax burden of earned income is heavier than that of business income. And the effective tax burden is actually heavier for earned income because the practice of truthful tax reporting is not established for business income. We suggest the following as remedies for improving equity of tax burden between earned income and business income. First, prepare the system of deducting actual expense instead of estimated expense for earned income. Second, expand the incentive for business persons to do book-keeping and thereby truthful tax reporting. Third, improve tax code to develop the environment for truthful reporting of taxable income. Fourth, select reasonably the persons liable for adjustment for taxable income. Fifth, abolish the system of simplified taxation of value-added tax.