Democratic Party: "Yoon Government's Economic Direction Returns to MB's Wealth Tax Cuts... Difficult to Agree on Wealth Tax Cuts"

Kim Seong-hwan, Chairman of the Policy Planning Committee of the Democratic Party of Korea, is attending the Policy Coordination Meeting held at the National Assembly on the 16th and delivering an opening remark. Photo by Yoon Dong-joo doso7@

[Asia Economy reporters Naju-seok and Park Joon-yi] The Democratic Party of Korea criticized the Yoon Seok-yeol administration's ‘New Government Economic Policy Direction’ as "feeling like a return to the Lee Myung-bak administration’s policies from 15 years ago that touted the trickle-down effect, favoring conglomerates, large corporations, and a small number of wealthy individuals," adding, "The neoliberal policies that were deemed failures and thought to have expired 15 years ago have revived in 2022, repackaged under the name of new economic policies."

On the 17th, Kim Seong-hwan, chairman of the Democratic Party’s Policy Committee, held a press briefing at the National Assembly and criticized, "Looking at the economic policy direction, it is focused on policies for a small number of conglomerates, large corporations, and major shareholders, in other words, tax cuts for the wealthy."

Regarding the government’s decision to lower the corporate tax top rate from 25% to 22%, he explained, "The 2018 increase of the corporate tax rate on corporate income exceeding 300 billion won from 22% to 25% was a normalization of the corporate tax cut that lowered the top rate from 25% to 22% during the Lee Myung-bak administration," adding, "Looking at the effective corporate tax rate recently, the tax burden on large corporations is not actually high." He elaborated, "It was 17.6% in 2017, increased to 19.1% in 2018, and then dropped back to 17.5% in 2019."

Regarding this matter, Chairman Kim stated, "The Democratic Party does not have any separate revision discussions."

Kim also criticized the government’s announcement to abolish the ‘Investment Win-Win Cooperation Promotion Tax Special System,’ saying, "While claiming to reform the corporate tax system to expand corporate investment and create jobs, the Yoon Seok-yeol administration’s economic policy is self-contradictory in that it plans to abolish systems that promote investment and employment."

He labeled the two-year postponement of the introduction of the financial investment income tax and the increase of the capital gains tax threshold per stock to 10 billion won as "typical tax cuts for the wealthy."

Regarding labor policy, he criticized, "They want to flexibilize working hours in the direction desired by conglomerates and large corporations," meaning "The Yoon Seok-yeol administration intends to return to a long working hours system."

The Democratic Party pointed out the plan to increase the share of nuclear power as "a clear regression against the international trend for carbon neutrality in an energy supply system centered on nuclear power." On healthcare, they criticized, "It aims to accelerate the commercialization and profit-seeking of healthcare," adding, "There is a high likelihood that this will lead to indiscriminate deregulation that does not consider the special characteristics of the healthcare sector."

Regarding the government’s pension reform, they said, "This is not the presidential promise of President Yoon Seok-yeol to promote pension reform through a ‘Public Pension Reform Committee’ directly under the president, but rather to prepare reform plans through a ‘Minister of Health and Welfare advisory body,’" adding, "This implies giving up government-led pension reform and shirking responsibility by asking stakeholders to reach an agreement on reform plans."

Chairman Kim said about the government’s economic policy direction, "We will not hesitate to provide bipartisan cooperation for reasonable and rational policies to revive people’s livelihoods and the economy," but added, "We will boldly oppose policies that favor specific conglomerates, large corporations, and a small number of wealthy individuals."

Meanwhile, the Democratic Party stated that there has been no cooperation request from the People Power Party or the government regarding the economic policy direction. Chairman Kim said, "We have not officially received any cooperation requests," adding, "Although it was pre-distributed to the media, there was no prior explanation to the Democratic Party, which holds legislative power."