"Cut Inheritance Tax" vs "Collect More": Political Debate Over 'Lee Jae-yong Inheritance Tax'

Park Yong-jin "Inheritance Tax is a Typical Unearned Income"
Park Sung-joong "We Must Follow the Global Trend of Reducing Inheritance Tax"

Samsung Electronics Vice Chairman Lee Jae-yong arrived on the afternoon of the 25th at the funeral hall of Samsung Seoul Hospital in Gangnam-gu, Seoul, where the funeral of Samsung Group Chairman Lee Kun-hee was held. [Image source=Yonhap News]

[Asia Economy Reporter Kim Seul-gi] Following the passing of Samsung Chairman Lee Kun-hee on the 25th, attention has been focused on the inheritance tax for Samsung Electronics Vice Chairman Lee Jae-yong and others. On the 28th, Park Yong-jin, a member of the Democratic Party of Korea, argued that "inheritance tax should be raised beyond 60%."

On that day, Park stated in an interview with CBS Radio's 'Kim Hyun-jung's News Show,' "Consider how many opportunities children from wealthy families receive as they grow up," emphasizing his point.

Park said, "I believe inheritance tax was institutionally established to oppose the formation of new social classes through wealth accumulation," adding, "During the eras of former Presidents Park Chung-hee and Syngman Rhee, the inheritance tax rates were much higher."

He further explained by analogy, "Inheritance tax is truly a form of unearned income. What does it have to do with me if my father worked hard? My father worked hard, but did I help him earn a lot of money?"

On the other hand, Park Sung-joong, a member of the People Power Party, opposed Park's claim by stating, "Inheritance tax should be reduced." Park Sung-joong emphasized, "If you consider a 1% reduction per year over 25 years, suddenly lowering it would cause problems for the country, so it should be done gradually."

He added, "Installment payments should be extended to 5 or 10 years, or even longer. Since a lot of taxes such as income tax, corporate tax, property tax, and capital gains tax have already been paid before inheritance, inheritance is now transparently revealed," he pointed out.

He continued, "In Japan, inheritance tax can be paid in installments over 20 years. In Germany, there is no interest for 10 years. Because inheritance tax is a significant and hot issue worldwide and can hinder businesses, we need to flexibly follow global trends," he added.