[2022 Economic Outlook Survey] 40% of Experts Say "Tax Increase Method, Wealth Tax Is Appropriate"

Asia Economy, Survey of 35 Economic Experts
33% Support Universal Tax Increase Including VAT Rate Hike
Followed by 20% for Tax Base Expansion

[Sejong=Asia Economy Reporter Kim Hyun-jung] Among experts who responded that the next government should pursue tax increases, 40% expressed the opinion that a ‘wealth tax’ targeting asset owners or high-income earners is the appropriate approach. Opinions that tax burdens should be distributed evenly through measures such as raising the value-added tax (VAT) rate also exceeded 30% of all respondents.

According to a ‘2022 Economic Outlook’ survey conducted by Asia Economy on the 1st, targeting 35 domestic economic experts including heads of economic-related academic societies, heads of government research institutes, leaders of economic organizations, and CEOs in the financial sector, among the 16 experts who expressed the opinion that ‘tax increases are necessary,’ 40% said that a wealth tax targeting high-income earners and asset owners is the most appropriate method. Universal tax increases through raising the VAT rate accounted for 33.3%, followed by tax base expansion through adjusting tax exemptions and income tracking at 20.0%.

Most of the other opinions (6.7%) suggested that ‘wealth tax’ and ‘tax base expansion’ should be pursued simultaneously. One respondent said, "It is necessary to simultaneously pursue wealth tax and tax base expansion through adjusting exemptions and tracking unreported income."

Leading presidential candidates Yoon Seok-yeol of the People Power Party and Lee Jae-myung of the Democratic Party of Korea are publicly emphasizing policies focused on tax cuts and tax increases, respectively. Candidate Lee mentioned a land holding tax and stated that after universal tax increases, basic income would be provided so that the actual burden falls only on the top 10%. However, he recently hinted at the possibility of withdrawing this plan. Candidate Yoon has mentioned plans to fully review the comprehensive real estate tax and significantly ease capital gains tax to encourage multi-homeowners to release their properties, thereby increasing supply.

Editor's Note

Kang Moon-sung, Professor, School of International Studies, Korea University; Kang Sung-jin, Professor, Department of Economics, Korea University; Kwon Kwang-seok, CEO, Woori Bank; Kwon Jun-hak, CEO, NH Nonghyup Bank; Kwon Tae-shin, Vice Chairman, Federation of Korean Industries; Kim Ki-moon, Chairman, Korea Federation of SMEs; Kim Sang-chul, CEO, Seoul Welfare Foundation and Professor, Department of Social Welfare, Hansei University; Kim Jung-tae, Chairman, Hana Financial Group; Kim Jong-sook, President, Korean Association of Women Economists; Kim Jin-il, Professor, Department of Economics, Korea University; Kim Heung-jong, President, Korea Institute for International Economic Policy (KIEP); Park Sung-ho, CEO, Hana Bank; Park Cheon-il, Director, International Trade and Commerce Research Institute, Korea International Trade Association; Sung Myung-jae, President, Korean Association of Public Finance and Professor, Department of Economics, Hongik University; Son Byung-hwan, CEO, NH Nonghyup Financial Group; Son Tae-seung, Chairman, Woori Financial Group; Song Ui-young, Professor, Department of Economics, Sogang University; Shin Kwan-ho, Professor, Department of Economics, Korea University; Yoo Jong-il, Dean, KDI School of Public Policy and Management; Yoon Jong-kyu, Chairman, KB Financial Group; Lee Geun, Vice Chairman, National Economic Advisory Council; Lee Dong-geun, Vice Chairman, Korea Employers Federation; Lee In-sil, Professor, Graduate School of Economics, Sogang University; Lee In-ho, Professor, Department of Economics, Seoul National University; Lee Jong-hwa, Professor, Department of Economics, Korea University; Lim Jin, Director, SGI, Korea Chamber of Commerce and Industry; Jang Se-jin, Director, Seoul Institute for Social Economy; Jeon Kwang-woo, Chairman, World Institute for Economic Research; Jung Se-eun, Professor, Department of Economics, Chungnam National University; Cho Yong-byeong, Chairman, Shinhan Financial Group; Joo Hyun, President, Korea Institute for Industrial Economics and Trade; Jin Ok-dong, CEO, Shinhan Bank; Heo Yong-seok, President, Hyundai Research Institute; Heo In, CEO, KB Kookmin Bank; Hong Jang-pyo, President, Korea Development Institute (KDI)