Democratic Party: "Abolishing Comprehensive Real Estate Tax and Lowering Inheritance Tax Rates Will Cause Fiscal Crisis"

Assemblyman Im Kwang-hyun Criticizes Policy Director Sung Tae-yoon's Remarks

Seong Tae-yoon, the Chief of Policy at the Presidential Office, announced on the 16th that the comprehensive real estate tax would be effectively abolished and the inheritance tax rate would be lowered, prompting criticism from the Democratic Party of Korea.

Democratic Party lawmaker Im Kwang-hyun attending the Democratic Party talent welcome ceremony last February [Image source=Yonhap News]

Lim Kwang-hyun, a former deputy commissioner of the National Tax Service and the Democratic Party's deputy floor leader, sharply criticized in a statement distributed to the media on the same day, saying, "The government should not just repeat tax cut theories that undermine the revenue base but must prepare measures to address the tax revenue shortfall." He also criticized, "While verbally advocating fiscal soundness, behind the scenes, they are causing a serious fiscal crisis through tax cuts for the wealthy."

Lim said, "Last year's tax revenue shortfall was 56 trillion won, the managed fiscal balance deficit until April this year is 64 trillion won, and the central government debt is 1,129 trillion won," and asked, "The national treasury is depleted, and people's livelihoods are in distress, so is it urgent to cut taxes for asset owners?"

He continued, "Once tax cuts are implemented, they are difficult to reverse," and criticized, "If measures to address the tax revenue shortfall are not prepared, the current government's tax cuts for the wealthy will soon return as a harsh bill for tax increases on ordinary citizens and future generations."

Earlier, Chief Seong appeared on KBS's 'Sunday Diagnosis' and said that the comprehensive real estate tax should only be imposed on owners of ultra-high-priced single homes and those holding multiple homes with a very high total value. He also explained that the inheritance tax rate should be lowered to a maximum of around 30%, considering the average level of the Organisation for Economic Co-operation and Development (OECD), and then further reformed.

Following Chief Seong's remarks, the Presidential Office stated to the media on the same day, "We are currently reviewing various directions regarding the reform of the comprehensive real estate tax system and inheritance tax system," adding, "Regarding specific reform plans in the future, we will consider the tax revenue effects, appropriate tax burden levels, impacts on local finances, and gather expert opinions, with decisions expected after July."