"Private Equity Funds Also Subject to Financial Investment Tax... Top Rate Reduced from 49.5% to 27.5%"
"Democratic Party Proposes Discussing Financial Investment Tax at Preferred Location, Time, and with Selected Debaters"
Han Dong-hoon, the leader of the People Power Party, rebutted the Democratic Party of Korea's claim that the financial investment income tax is a tax on the wealthy by citing 'private equity funds' as an example. He argued that once the financial investment income tax is implemented next year, the highest tax rate on private equity funds, which are mainly invested in by high-net-worth individuals, will be nearly halved, questioning whether the tax is truly targeted at the rich.
At the Supreme Council meeting held at the party headquarters in Yeouido, Seoul, on the 8th, Han said, "The Democratic Party, including Policy Committee Chair Jin Seong-jun, is framing the financial investment income tax as a tax on the wealthy, but upon closer examination, that statement is incorrect." He added, "There is a way that truly wealthy investors invest in the stock market. That is through private equity funds," and explained, "The private equity fund system reduces various regulations and risk guarantees applied to public funds, but since wealthy individuals invest, the system requires them to bear the risks and responsibilities."
Han stated, "Currently, profits from private equity fund redemptions are taxed as dividend income, subject to comprehensive taxation with a maximum rate of 49.5%," and added, "Private equity funds are also subject to the financial investment income tax, but if the tax is enforced, the highest tax rate will be 27.5%." He continued, "This means the tax rate itself will be reduced by almost half compared to now," and noted, "Since it varies depending on circumstances such as listed and unlisted stocks, it cannot be said that the rate is uniformly halved, but the Democratic Party's framing of this as a tax on the wealthy is not even accurate."
Han also pressured the Democratic Party to participate in discussions on the financial investment income tax on the same day. He said, "The Democratic Party withdrew their own proposal for a debate, creating a situation where the public might see it as them running away. It is disappointing," and proposed, "We suggest holding a public debate on the financial investment income tax at a time and place of their choosing, with debaters they prefer."
On the 6th, Han proposed to the Democratic Party to hold a joint debate on the financial investment income tax. In response, Democratic Party lawmaker Lim Kwang-hyun said, "Let's do it immediately." Subsequently, Han intensified his offensive by saying that it did not matter if the debate was not with former leader Lee Jae-myung but with Park Chan-dae, the acting party leader and floor leader, as the debate should be conducted at the level of party leaders. When Park effectively declined, Han once again proposed a debate between the ruling and opposition parties.
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