[Full Text] Lee Jae-myung: "200,000 KRW Annual Basic Income for Youth During Term, 100,000 KRW for All Citizens"

[Asia Economy Reporter Koo Chae-eun] Lee Jae-myung, the Democratic Party presidential candidate and Governor of Gyeonggi Province, announced on the 22nd a policy plan to provide an annual youth basic income of 2 million KRW per person during the next government’s term if he becomes president.

At 10 a.m. on the same day, Governor Lee held a press conference at the National Assembly in Yeouido, Seoul, to announce a basic income policy pledge centered on this plan. He specifically stated, “We will gradually implement basic income and pay 1 million KRW to all citizens during the next government’s term.” For youths aged 19 to 29, in addition to the universal basic income, an additional youth basic income of 1 million KRW per year will be provided. The intention is to enable young people to receive a total of 22 million KRW in basic income over 11 years from age 19, allowing them to invest more time in studies and skill development.

Governor Lee explained, “The final target amount for basic income is 500,000 KRW per month, which is the living expense level for basic livelihood security recipients as previously announced, but due to financial circumstances, it will not be possible to reach this target within the next government’s term.” He stated that 25 trillion KRW each, totaling 50 trillion KRW, will be secured through fiscal structure reform and phased reduction of tax exemptions. The remainder is expected to be obtained through corrective taxation such as basic income land tax, carbon tax, and basic income earmarked taxes.

Before implementing the system, Governor Lee plans to establish a presidential basic income committee to publicize the basic income agenda and build public consensus. He said, “By introducing universal basic income, we will create a new history of alleviating polarization and sustainable growth in this era of great transformation.”

Below is the full text of Governor Lee Jae-myung’s press conference statement.

Democratic Party Presidential Primary Candidate Lee Jae-myung’s 2nd Basic Income Policy Pledge Announcement Press Conference Statement

Competent Lee Jae-myung with Mainstream Competitiveness, Honest Lee Jae-myung, Promise-Keeper Lee Jae-myung

Basic income, the core of fair growth, Lee Jae-myung will make it happen!

The 4th Industrial Revolution threatens jobs. Due to socio-economic polarization, even the minimum dignified life and survival are at risk. Now, productivity is higher than ever, but consumption capacity is insufficient. There is plenty of money to invest, but it is difficult to find places to invest. The era when focusing national finances on supply increased employment and consumption is over; now, alleviating polarization, i.e., strengthening distribution, helps economic growth.

In this era of great transformation, a large-scale government role turning crisis into opportunity is an important growth tool, but increasing public transfer income (government support for household income), which is among the lowest globally, and household consumption is also a path to economic growth.

Dear citizens,

Recall the economic effect of the first disaster relief fund paid to all citizens last year in the form of expiring local currency. This is why I say local currency-type basic income is an economic policy before being a welfare policy.

Basic income paid in expiring local currency maximizes economic revitalization effects, unlike cash, to activate local neighborhood economies and resolve sales polarization.

Basic income is not difficult. If last year’s first disaster relief fund had been paid equally per individual, not per household, and regularly once a year or once a month, that would have been basic income.

The youth dividend in Seongnam City, youth basic income in Gyeonggi Province, and two rounds of disaster basic income payments have already proven statistically and experientially how much vitality they brought to traditional markets and local businesses.

Basic income is a welfare-economic policy that simultaneously achieves income polarization alleviation and economic revitalization, doubling fiscal efficiency?a two-birds-one-stone complex policy.

If administration is about following existing paths well, politics is about creating new paths.

A proper politician must overcome fear and endure wounds to pave unexplored paths.

I, Lee Jae-myung, broke through the Park Geun-hye government’s oppression, even fasting for 11 days at Gwanghwamun Square, to start youth basic income in Seongnam City and expand it in Gyeonggi Province.

The basic income combined with local currency, which I developed and expanded nationwide, has proven effective as a welfare-economic policy and attracted global attention.

I, Lee Jae-myung, will introduce basic income as a national policy, minimizing tax resistance, and open the path of great transformation from a low-burden, low-welfare state to a medium-burden, medium-welfare state.

■ Basic Income Pledge

1. Establish a Presidential Basic Income Committee and Publicize Basic Income

Basic income is still unfamiliar, but the more citizens learn about it, the more they agree on its necessity.

After two deliberative discussions for publicizing basic income in Gyeonggi Province, support for basic income increased from 50% before the discussions to 79% after.

Basic income does not mean consolidating existing insufficient welfare. Nor is it a deception to propose “welfare without tax increases.”

Although Korea’s economy is at an advanced country level, welfare is about half the OECD average, and the tax burden rate is significantly low. To raise the tax burden and increase welfare, tax increases are necessary, but distrust of the government and tax resistance make it difficult.

However, if the majority of citizens are convinced that the benefits outweigh the tax burden, public consent for tax increases can be obtained.

Basic income is a feasible policy that can raise the tax burden rate and increase welfare spending while minimizing tax resistance and alleviating polarization.

Full-fledged basic income with tax increases is possible only after citizens experience and agree on the utility of basic income and the necessity of tax increases.

I, Lee Jae-myung, will establish a presidential national basic income committee to build consensus on basic income policy, design it, and implement it gradually.

2. Basic Income Method

Since basic income requires sufficient verification, public consent, and securing resources, full implementation at once is impossible; it will start within feasible limits and expand gradually and stepwise.

The basic income I envision includes universal basic income starting with a small amount for all citizens and increasing to a large amount, and partial basic income starting with a large amount for some groups such as youth or some rural areas and expanding the target.

Youth basic income in Seongnam City and Gyeonggi Province, farmer basic income in Gyeonggi Province, and rural basic income under preparation fall under this.

3. Basic Income Will Be Implemented Without Fail.

The long-term final target amount for basic income is 500,000 KRW per month, the living expense level for basic livelihood security recipients.

However, due to financial circumstances, the final target cannot be reached within the next government’s term, but during the next government’s term, 1 million KRW per year will be paid to youth,

and 1 million KRW per person per year (4 million KRW per four-person household) will be paid to all other citizens.

1) Youth Basic Income of 1 million KRW per year

Since 2016, Seongnam City’s youth dividend and since 2019, Gyeonggi Province’s youth basic income have provided 24-year-old youths with 250,000 KRW quarterly, totaling 1 million KRW annually in local currency.

Though a modest amount, it has brought significant changes to youths’ lives. Youths who used to work part-time jobs for living expenses now have more time for study and self-development, preparing and dreaming for the future.

From 2023, the Gyeonggi Province youth basic income will be expanded nationwide to provide youths aged 19 to 29 (about 7 million people), who have become a vulnerable group, with an additional 1 million KRW per year besides universal basic income.

Once universal and youth basic incomes are established, youths will receive a total of 22 million KRW in basic income over 11 years from age 19, enabling them to devote more time to studies and skill development.

2) 1 million KRW per year to all citizens

Except for youth basic income recipients, all citizens will receive at least 1 million KRW per year (4 million KRW per four-person household) in expiring local currency.

Starting from 2023, the year after the term begins, 250,000 KRW per person (1 million KRW per four-person household) will be paid once, increasing to at least four times during the term.

The payment amount per round is designed based on last year’s first disaster relief fund of 1 million KRW per four-person household (250,000 KRW per person).

3) Partial basic incomes for farmers, elderly, children and adolescents, disabled persons, cultural artists, and other sectors including crisis regions in local areas will be announced during the respective policy pledge announcement processes.

4. Basic Income Funding

The next government’s basic income at the introduction stage will start with general funds, tax exemption reductions, and urgent corrective taxes (basic income land tax and carbon tax). From the following government, basic income earmarked taxes will be introduced to expand basic income substantially.

However, even in the next government, through public consensus,

it is expected to be fully possible to pay more than 1.5 times the basic income amount I pledged.

1) Fiscal structure reform, budget savings, budget priority adjustments, natural budget increases above inflation, and strengthened tax base management: over 25 trillion KRW.

2) Phased reduction of tax exemptions amounting to about 60 trillion KRW annually: over 25 trillion KRW.

3) Urgent corrective taxes

【 Basic Income Land Tax 】

To realize the public concept of land, block unearned income, and curb real estate speculation, a national land holding tax must be imposed. A 1% land holding tax is about 50 trillion KRW but will face strong tax resistance.

However, if the entire collected tax is newly established as a basic income earmarked tax and distributed equally to citizens, about 80% to 90% of citizens will be net beneficiaries receiving more basic income than taxes paid, minimizing tax resistance, alleviating polarization, revitalizing the economy, and curbing speculation with complex policy effects.

To stop ruinous real estate speculation, normalize the real estate market, and protect actual residents with one home or the homeless,

an urgent nationwide basic income land tax must be imposed and distributed equally to all citizens.

【 Basic Income Carbon Tax 】

To transition to a carbon-zero economy amid the climate crisis, imposing a carbon tax is the only way. Even a 50,000 KRW per ton tax amounts to about 30 trillion KRW, and raising it to 80,000 KRW or more as recommended by international organizations would yield 64 trillion KRW.

Some of this carbon tax revenue will be used to support industrial transition, and some will be distributed equally to citizens facing price increases, reducing tax resistance and inflation damage, while achieving complex effects such as helping carbon emitters adapt to a low-carbon society, reducing fossil fuel use, alleviating income polarization, and revitalizing the economy.

4) General basic income earmarked taxes

Though difficult to implement within the next term as a long-term goal, once the effectiveness of basic income policy is proven and a foundation of public consensus is established,

the introduction of general basic income earmarked taxes will also be possible.

5. We will create sustainable growth for Korea through basic income.

Basic income combined with expiring local currency is the core of a fair growth strategy.

It is both a policy to alleviate income polarization, the greatest challenge of our time, and an economic policy that expands consumption, supports small business owners, and alleviates sales polarization to revive local economies and neighborhood businesses.

Basic income land tax and carbon tax correct unfair economies where a few monopolize profits from real estate speculation and carbon emissions, transforming them into fair economies and making sovereign citizens the actual owners of shared property through transformative policies.

If I had just 7,000 KRW per month 40 years ago, I would not have suffered an arm disability from working in a factory to pay for academy fees and missed military service.

If the Songpa three mothers had just 300,000 KRW per month through a basic income system, their family’s extreme choices would not have occurred, and the “COVID Jean Valjean” would not have stolen eggs out of hunger.

To solve socio-economic inequality and maintain a sustainable community,

global CEOs like Pope Francis, Bill Gates, Mark Zuckerberg, and Elon Musk

also advocate for the introduction of basic income.

Basic income based on economic rights is a minimum social safety net protecting all citizens in addition to existing welfare policies. Just as Korea’s imperfectly established medical insurance system under the Park Chung-hee regime 40 years ago has developed into a world-class welfare system, Korean-style basic income will become a model attracting global attention.

Countries worldwide are conducting various basic income experiments. However, Korea’s Gyeonggi Province is the most advanced in continuously implementing basic income through policy rather than experiments.

I, Lee Jae-myung, have never made impossible promises and have always kept my pledges. That is why during my two terms as mayor of Seongnam and governor of Gyeonggi Province, I achieved an average pledge fulfillment rate of 95%, unmatched by any candidate.

Basic income is the most effective core policy to save citizens, the nation, and the market economy in a future society where jobs disappear and polarization intensifies.

Just as I overcame opposition from the Park Geun-hye government with indomitable courage and drive to implement youth basic income,

I will create a new history of alleviating polarization and sustainable growth in this era of great transformation by introducing universal basic income.

Basic income, the core of fair growth, Lee Jae-myung will make it happen!

Thank you.

July 22, 2021

Democratic Party 20th Presidential Primary Candidate No. 1 Lee Jae-myung