Democratic Party's "Salary Defense Squad" Secretary Im Kwanghyun Holds Press Conference
Proposes Amendment to Income Tax Act... First Revision in 16 Years if Passed
The Democratic Party of Korea is moving forward with a legislative amendment to raise the basic income tax deduction amount from 1.5 million won to 1.8 million won, an increase of 300,000 won. The intention is to reduce the tax burden on salaried workers. Attention is focused on whether this will stimulate the votes of moderate voters who have been distancing themselves from the Democratic Party and its leader Lee Jae-myung.
On February 16, ahead of the April 10 general election last year, Lee Jae-myung, leader of the Democratic Party of Korea (photo right), and Lim Kwang-hyun, former deputy commissioner of the National Tax Service and newly recruited talent to the party (currently a Democratic Party lawmaker), are taking a commemorative photo at the National Assembly. Photo by Yonhap News
On the 3rd, Im Kwang-hyun, a member of the Democratic Party's special committee called the ‘Salary Defense Squad’ and its secretary, held a press conference at the National Assembly and stated, "While the basic deduction amount has been frozen at 1.5 million won for 16 years, earned income tax has increased nearly fivefold during the same period," adding, "there is a need to adjust the deduction amount."
Im announced that he plans to push for an amendment to the Income Tax Act reflecting this. Raising the basic deduction amount reduces the taxable amount, thereby lowering the tax burden on income tax payers. Im will be the main proposer of the bill.
Im pointed out, "Although the tax burden ratio relative to GDP has sharply declined due to tax cuts for large corporations and ultra-wealthy individuals, the burden ratio of earned income tax relative to GDP has increased," adding, "It is a situation where the tax shortfall is being compensated by the fragile wallets of salaried workers."
According to Im, earned income tax revenue increased from 38.5 trillion won in 2019 to 61.5 trillion won last year. The earned income tax burden ratio rose from 1.6% in 2015 to 2.4% last year, an increase of 0.8 percentage points. Applying the 2014 Income Tax Act to 2022 prices, the tax increase effect due to inflation on earned income tax is estimated to be as high as 19.5 trillion won.
Im criticized, "In effect, nearly 20 trillion won of forced tax increase has been imposed solely due to inflation, yet the basic deduction amount for earned income tax has remained unchanged for 16 years, which is unfair."
Lee Jae-myung, leader of the Democratic Party, has also continuously emphasized the need to reform earned income tax. On the previous day, Lee posted on Facebook, "'The lives of 20 million salaried workers are the livelihood of the people, and correcting unfairness is the duty of politics,'" adding, "It is urgent to realize the basic deduction for earned income tax to protect the fragile wallets of salaried workers and increase their disposable income. This is not a matter of left or right, but a fundamental issue of fairness."
Earlier in February, Lee posted on Facebook under the title ‘Are salaried workers slaves?’ stating, "Despite nominal wages rising due to inflation, real wages are not increasing, yet taxes continue to rise due to progressive taxation."
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