[Political Focus] Lee Jae Myung's Tax Cut Policies Falter Amid Lack of Concrete Plans for Securing Tax Revenue

Right-Leaning Policies Pile Up,
But Tax Revenue Solutions Remain Lacking
"Korean Nvidia" Proposal Sparks Debate
Concerns Over Tax Cut Stance Within the Party

Lee Jae Myung, leader of the Democratic Party of Korea, is facing criticism from political circles for his recent remarks about creating a "Korean version of Nvidia," with opponents calling it an underdeveloped alternative for securing tax revenue in the face of a series of tax cut policies. Some point out that Lee's right-leaning policies, aimed at appealing to centrist voters ahead of an early presidential election, could be hampered by the very real problem of a massive tax revenue shortfall.

The controversy began during a YouTube discussion on artificial intelligence (AI) policy, released by the Democratic Party over the past weekend. In the discussion, Lee stated, "If a company like Nvidia were to be established in Korea and 30% of its shares were distributed to all citizens, wouldn't we achieve a society that does not rely on taxes?" His idea is that if the government jointly invests in AI-related companies requiring large-scale funding through a sovereign wealth fund or national fund and holds equity, then, should such a company generate significant profits like Nvidia, the tax burden on citizens could be reduced.

Political observers interpret Lee's "Korean Nvidia" remarks as a clear reflection of the party's internal struggle to secure tax revenue. They explain that the more Lee emphasizes a tax-cutting policy stance, the greater the pressure becomes to find ways to make up for lost revenue. Previously, in November of last year, Lee began by advocating for the abolition of the Financial Investment Income Tax, and has since repeatedly highlighted tax reform measures such as expanding inheritance tax deductions, revising earned income tax, and easing the comprehensive real estate tax.

Lee Jae Myung, leader of the Democratic Party of Korea, is attending the Supreme Council meeting held at the National Assembly on the 24th. 2025.2.24 Photo by Kim Hyun Min

The problem is that these tax cut policies, centered on the core agenda of "Jalsanism," are being criticized as unrealistic populism. Critics point out that, while the government’s fiscal soundness is being shaken by tax revenue shortfalls exceeding 80 trillion won for two consecutive years, there are no concrete measures to secure new tax sources. Indeed, the ruling party has criticized Lee’s Nvidia proposal, stating, "The very idea of dividing up ownership from the start is problematic. It is a socialist approach."

Lee has made it clear that he has no intention of backing down from his tax cut policies. In response to political criticism of his Nvidia remarks, he countered, "This is ignorant criticism. It reflects a level of understanding akin to illiteracy." He also plans to continue pushing for earned income tax cuts. On March 6, the Democratic Party will hold a forum at the National Assembly to discuss ways to rationalize the taxation of earned income.

Concerns are also emerging within the Democratic Party regarding Lee’s tax cut stance. Oh Ki Hyung, the lawmaker in charge of inheritance tax reform within the party, told Asia Economy, "If tax cuts are proposed without concrete alternatives for securing revenue, it will certainly come back as a boomerang. This is not the time to be discussing tax cut policies."