Assemblyman Ando-gul: "Restoring People's Livelihoods More Urgent Than Tax Cuts for the Wealthy"

Criticism of Presidential Office's Plan to Abolish Comprehensive Real Estate Tax and Ease Inheritance Tax

The Presidential Office's announcement of future plans to abolish the comprehensive real estate tax and significantly ease inheritance tax has been met with emphasis from National Assembly member Ando-geol that 'restoring people’s livelihoods' is more urgent.

On the 17th, Representative Ando-geol issued a press release stating, “It is completely incomprehensible that the Yoon Seok-yeol administration is once again proposing tax cuts when the central and local governments’ finances have deteriorated, recording a historic tax revenue shortfall of 56 trillion won last year alone.”

He stressed that now is the time not to accelerate tax cuts for the wealthy but to introduce drastic measures to restore people’s livelihoods.

Representative Ando said, “The target group for the reduction of the highest inheritance tax rate mentioned by the Presidential Office was 955 people as of 2022,” adding, “This accounts for only 0.3% of all heirs, and easing inheritance tax for the wealthy and conglomerates is neither urgent nor a pressing national issue. Government support for small business owners, self-employed individuals, and socially vulnerable groups suffering from high inflation, high interest rates, and sluggish domestic demand is more desperately needed than ever.”

He continued, “Inheritance tax and comprehensive real estate tax are representative asset taxes that play a role in alleviating polarization between social classes,” and pointed out, “If the government accelerates tax cuts for the wealthy, the increasingly severe asset polarization will worsen further.”

Furthermore, he said, “Above all, lowering the highest inheritance tax rate and abolishing the comprehensive real estate tax and financial investment tax will result in an additional annual tax revenue loss of several trillion won,” and criticized, “With such massive tax cuts for the wealthy, the national treasury, which is already running dry, will be left in an even worse state. There is no government more irresponsible than this.”

According to Representative Ando, during the two years of the Yoon Seok-yeol administration, tax cut policies for the wealthy have already resulted in a tax reduction effect exceeding 25 trillion won this year. In addition to the tax law revisions that brought about an annual tax cut effect of 15.5 trillion won, including reductions in fuel tax and corporate tax through enforcement ordinances, the total tax revenue decrease effect amounts to approximately 25.8 trillion won.

He emphasized, “It is contradictory to implement large-scale tax cuts exceeding 25 trillion won annually while refusing to provide livelihood recovery funds citing fiscal soundness,” adding, “As of April, the national tax revenue progress rate is only 34.2%, which is extremely low, and warning signals have been triggered for securing tax revenue this year as well.”

He also questioned, “In this situation, while aggressively pushing for additional tax cuts for high-asset individuals to reduce their burden, are livelihood measures to help small self-employed business owners and ordinary citizens pushed to the sidelines?” and asserted, “The crisis faced by small self-employed business owners that has continued since the COVID-19 pandemic has now reached a breaking point.”

He further explained, “About 70% of self-employed individuals earn less than 2.5 million won per month, and over 900,000 closed their businesses just last year. Many of those remaining are barely surviving on loans, and their loan delinquency amounts have increased by 52.5% over the past two years.”

Representative Ando stated, “In this era of high inflation, real incomes have shrunk, causing people to tighten their wallets. With sustained high interest rates, the burden of interest payments forces people to tighten their belts even more, creating a vicious cycle where the economy fails to recover,” and criticized, “The government is intoxicated by the surprise growth rate in the first quarter and is ignoring the domestic demand slump and the suffering of vulnerable groups, which are overshadowed by the semiconductor boom.”

He then urged the ruling party, “Please promptly cooperate in organizing the National Assembly and take the lead in preparing urgent livelihood measures together with the opposition parties.”