"Tax Cuts for the Wealthy in a Budget Deficit? Unacceptable"
The Democratic Party of Korea on the 3rd expressed the position that the Presidential Office must first present a plan to increase tax revenue in relation to the Presidential Office's push to effectively abolish the comprehensive real estate tax and reform the inheritance tax. The government must prepare a plan to secure tax revenue if it intends to implement tax cuts such as on the comprehensive real estate tax.
On the 17th, Lee Hae-sik, the senior spokesperson of the Democratic Party, met with reporters after the Democratic Party's Supreme Council meeting held at the National Assembly and said, "There were criticisms regarding the Presidential Office's announcement on tax reform at the Supreme Council meeting," adding, "Last year alone, there was a tax revenue shortfall of 56 trillion won, and this year a shortfall of over 30 trillion won is predicted. The Yoon Seok-yeol administration is emphasizing fiscal soundness. Despite this national governance policy, the government is pushing for inheritance tax reform and the abolition of the comprehensive real estate tax, which are considered tax cuts for the wealthy, without presenting a plan to secure tax revenue. Our party cannot accept this."
Through a Q&A session with reporters, the spokesperson stated, "It appears to be a package of policies favorable to People Power Party supporters, seen as a kind of political offensive," and added, "Now is the time to first prepare measures to increase tax revenue; it is not the stage to discuss tax cut policies. This is our official stance."
The Democratic Party cannot accept tax cut policies being pursued amid tax revenue shortfalls and the government's fiscal soundness policy. This effectively rejects the Presidential Office's tax reform discussions.
Lee Jae-myung, leader of the Democratic Party of Korea, is speaking at the Supreme Council meeting held at the National Assembly on the 17th. Photo by Hyunmin Kim kimhyun81@
Seong Tae-yoon, the Policy Chief of the Presidential Office, appeared on KBS broadcast the previous day and expressed the position that the comprehensive real estate tax (Jongbu-se) should be significantly eased to the level of effective abolition, and inheritance tax should be reformed by greatly lowering the top tax rate to 30%, which is the level of the Organisation for Economic Co-operation and Development (OECD).
Regarding the reform of the comprehensive real estate tax, he pointed out, "The effect on stabilizing housing prices is minimal, and there is a considerable element of tax burden being passed on to tenants," and said, "Because of these factors, I think abolition or a complete reform is necessary." Seong emphasized, "It is desirable to have ultra-high-value single homeowners and those whose total value of owned houses is very high pay taxes, while abolishing the comprehensive real estate tax for those who own general houses or multiple houses but whose total value of owned houses is not very high."
Regarding inheritance tax, he said, "It is a time when reform is necessary," and added, "It is necessary to change it into a form of estate acquisition tax." He mentioned the current uniform deduction of 500 million won for inheritance tax, saying, "It should be structured so that inheriting an apartment in Seoul does not impose an excessive inheritance tax burden."
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