[Column] Unable to Call a Bomb a Bomb

Officials affiliated with the Citizens' Coalition for the Unconstitutionality of the Comprehensive Real Estate Tax posted a notice regarding the unconstitutionality claim of the comprehensive real estate tax at an apartment in Seocho-gu, Seoul on the 22nd. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kim Hyunjung] "The comprehensive real estate tax on a 2.6 billion won house is less than the tax on a Sonata. (Song Young-gil, leader of the Democratic Party)" "Since this tax does not apply to the general public, it is hard to agree that it is a bomb. (Kim Tae-ju, Director of the Tax Policy Bureau, Ministry of Strategy and Finance)"

As the comprehensive real estate tax (종부세) payment notices, which started being sent out on the 22nd, were criticized as being 'bomb-level,' the ruling party and government have repeatedly refuted these claims. Their main argument is that this tax affects only 2% of the population, there are deduction benefits for single-homeowners, the tax revenue helps balanced regional development, and compared to major countries like the United States, Canada, and France, the burden is relatively light, so it is not a bomb.

However, this year's 종부세 is clearly a bomb. It is openly acknowledged not only in the market but also by government officials. Although it is not an atomic bomb aimed at all citizens, it targeted multi-homeowners by significantly increasing the number of taxpayers (947,000 people, a 42% increase from last year) and the tax amount (5.7 trillion won, a 217% increase).

The important point is that the timing and targets of this bomb were 'pre-announced.' Setting aside the debate over whether the tax rate increase and the strengthening of tax burdens due to the realistic adjustment of official property prices were justified, the government has declared that it will lower the expected returns on real estate investment and increase the supply of properties to stabilize housing prices through this tax attack. They have consistently revealed the means and methods of this bomb drop through several real estate measures, and this 종부세 is a clear result of that intention.

What is needed now is not self-denial that 'this is not a bomb,' but a consistent policy message that 'bombs will continue to fall. If you want to avoid them, dispose of your multiple homes.' Why can't they say it? Admit confidently that this bomb is the bomb I prepared, that this bomb is a real estate stabilization measure. The only thing that has changed since the announcement of the measures, including market prices, is that government approval ratings are falling ahead of the presidential election. If they fear public discontent, they need to revise the bomb-dropping strategy. The stubborn explanation that it is not a bomb is nothing but wordplay.