[Numbers in the News] Opposition's Financial Investment Tax Debate Draws 7,400 Concurrent Viewers... Successful Event, 'Debate=Role Play' Followed by "Director=Shot" Controversy

"Lee Kang-il! (Member of the National Assembly)"

The policy debate held by the Democratic Party of Korea at the National Assembly in Yeouido, Seoul on the 24th did not start smoothly.

Just before the debate began at 10:30 a.m., a participant affiliated with the Korea Stock Investors Union shouted at Lee Kang-il, a Democratic Party lawmaker, causing a commotion that lasted several minutes. On the day the opposition party was discussing the implementation of the Financial Investment Income Tax (금투세), representatives from the Korea Stock Investors Union tried to attend the debate to hear related opinions, but Democratic Party officials blocked their entry citing a party caucus meeting.

Photo by Delhi Minju TV YouTube Channel

On that day, the Democratic Party held a debate on whether to 'implement' or 'postpone' the Financial Investment Income Tax (금투세). The Financial Investment Income Tax is a system that imposes a single tax by combining the overall gains and losses of an individual from financial investments such as stocks, bonds, funds, and derivatives, instead of taxing each product separately as before. It was decided through a bipartisan agreement in 2020 to be implemented from 2023, but the implementation was postponed for two years at the end of 2022. This debate was organized to consider whether to postpone the implementation or proceed as scheduled.

However, the day before, Lee Kang-il, a Democratic Party lawmaker, responded to a message from an investor opposing the implementation of the Financial Investment Income Tax by saying, "This debate is part of a role play," sparking controversy over whether the debate was merely a formality. In response, Han Dong-hoon, leader of the People Power Party, criticized, "Lee Kang-il admitted that 'this debate is a role play.' Instead of this role play or good cop bad cop game, I say abolish the Financial Investment Income Tax."

Despite these controversies, the Financial Investment Income Tax debate proceeded amid intense interest from domestic stock investors and the general public who are keenly watching the decision on next year's implementation.

The debate, broadcast live on the Democratic Party's official YouTube channel 'DeliMinjuTV,' at one point surpassed 7,400 concurrent viewers. As of 3 p.m. that day, the cumulative views exceeded 50,000, the highest since the live broadcast of the 1st regular national party members' meeting last month.

The debate was divided into the implementation team and the postponement team. The implementation team consisted of lawmakers Kim Young-hwan, Kim Sung-hwan, Lee Kang-il, Kim Nam-geun, and Lim Kwang-hyun, while the postponement team included lawmakers Kim Hyun-jung, Lee So-young, Lee Yeon-hee, Park Seon-won, and former lawmaker Kim Byung-wook.

The implementation team argued that the Financial Investment Income Tax is necessary from the perspective of tax justice.

Kim Young-hwan (implementation team) said, "The Financial Investment Income Tax is essentially a tax system that applies a consistent tax rate to income generated from investment activities, enhancing tax equity and aligning with global standards."

On the other hand, the postponement team opposed the tax, arguing that it would increase instability in the stock market. They claimed it would not be too late to introduce the tax after improving the stock market structure.

Kim Hyun-jung (postponement team) emphasized, "Over the past four years, stock markets in the U.S., Europe, and Japan have been trending upward, but our stock market has only recovered about one-third of its peak and remains stuck in a severe box range. Stock market value enhancement and capital market advancement should come first."

The general public watching the debate live on DeliMinjuTV YouTube engaged in heated discussions in real time.

Pro-implementation opinions such as "Support Financial Investment Income Tax" and "The two-year postponement is over, implement it immediately" clashed sharply with postponement opinions like "Abolition is correct" and "Instead of debating the Financial Investment Income Tax, explain private equity fund rebates."

Park Chan-dae, floor leader of the Democratic Party of Korea, is speaking at the Democratic Party of Korea policy members' meeting held at the National Assembly on the 24th under the theme "A Happy and Just Republic of Korea, How to Implement the Financial Investment Income Tax?" Photo by Kim Hyun-min kimhyun81@

After the debate, attention was drawn to lawmaker Kim Young-hwan's remark advising to "invest in inverse (investment methods betting on index declines)."

Former lawmaker Kim Byung-wook asked Kim, "Under these adverse conditions, the likelihood of the Korean stock market's returns falling or stagnating is high. Is it a rational decision to introduce this system now?" Kim replied, "I would like to check if there are other variables related to stock prices. For example, the problems in the Chinese market caused by the Yoon Seok-yeol administration, and last year’s average advanced economy growth rates: 3.3% globally, 1.4% in Korea, 2.5% in the U.S., and 1.9% in Japan. If you firmly believe the market is going downward, wouldn't it be better to invest in inverse products?"

Kim continued, "Why not buy put options on futures? The stock market and the futures derivatives market have participants who profit when stock prices fall, and others who profit when prices rise through those markets."

Following these remarks, the video received a flood of criticism such as, "Whether economy or assets, the basic view is upward, but telling people to short sell means I will never vote for the Democratic Party again," "Is it possible for a lawmaker to tell citizens to short sell their own country’s stock market?" and "Is it appropriate for a lawmaker to say if the Financial Investment Income Tax causes stock prices to fall, invest in inverse or short products?"

The Democratic Party plans to gather internal opinions and finalize its stance on the Financial Investment Income Tax in the future.