[Pledge Analysis] "The Only Duty of Companies Is to Pay Taxes"... Lee Junseok's Economic Growth Strategy

Conversion of Corporate Tax to Local Tax to Encourage Tax Cut Competition
Pledge to Establish a Regulatory Tribunal under the Prime Minister
Proposal to Consolidate Government Ministries and Introduce Solid Start Fund for Youth

"The only social responsibility that South Korean companies should have in the future is to pay corporate taxes properly. I will ensure that there are no other obligations beyond that."

Lee Junseok, the presidential candidate of the Reform New Party, who advocates for reformist conservatism, is putting forward market-friendly pledges in this presidential election. At the Kwanhun Club on April 30, he pointed out, "In Korea, as soon as you make money, people hold out their hands and pressure you to create jobs." Lee's position is that, apart from faithfully paying taxes, companies should not be burdened with any other obligations such as job creation.

Lee Junseok, the presidential candidate of the Reform New Party, is holding a focused campaign rally on the 13th at 2.28 Memorial Central Park in Jung-gu, Daegu. Yonhap News.

Furthermore, there is a pathway for corporate tax relief if companies relocate to regions outside the capital. Through his campaign pledges, Lee has proposed converting 30% of the national corporate tax to a local tax. At first glance, this appears to be a policy to strengthen local finances, but it also includes allowing local governments to set their own corporate tax rates, thereby encouraging competition among local governments to lower rates (by up to 50%). Lee's camp argues, "For competitive cities like Busan, their rivals should not be Seoul, but places like Singapore or Texas, so competition to lower corporate taxes is desirable." This policy creates the possibility for corporate tax burdens to be reduced by up to 15% (30% local tax portion x maximum reduction rate of 50%), depending on the will of local governments. Regarding the minimum wage, local governments would be allowed to select a rate within 30% of the minimum wage set by the Minimum Wage Commission. While the intention is to account for regional differences in living costs, it also leaves open the possibility of competition among local governments to lower the minimum wage.

Lee has also proposed active measures regarding regulations. He has made regulatory reform a key pledge, stating, "We will go beyond the limits of regulatory sandboxes and benchmark the regulatory standards of countries leading in specific industries to reform Korea's regulatory environment." He has promised 10 years of regulatory exemptions and the establishment of a regulatory tribunal directly under the Prime Minister. He has also pledged to ease regulations on the cloud and data industry, fintech, and autonomous vehicles to the level of technology-leading countries. Regarding the role of government, he has proposed streamlining. Among the top ten pledges submitted to the National Election Commission, his first pledge is to consolidate the current 19 government ministries into 13.

While Lee, like other candidates, emphasizes science and technology such as artificial intelligence (AI), he differs in that he focuses on strengthening education and giving preferential treatment to scientists. At a focused campaign rally at Cheonggyecheon Plaza in Seoul on May 12, he said, "Those who talk about 100 trillion or 200 trillion won honestly know nothing about AI," and added, "To conduct AI research and commercialize AI development, South Korea needs countless talented people." To this end, he proposed a national responsibility system for math education and the establishment of a new Ministry of Education and Science by merging the Ministry of Education and the Ministry of Science and ICT.

Amid his overall market-friendly policies, it is notable that Lee has put forward support measures for young people based on the logic of intergenerational fairness. He has pledged a 'Solid Start Fund,' which would provide young people with loans of 5 million won per quarter, up to a maximum of 50 million won, at a fixed interest rate of 1.7%. The plan is to reorganize existing student loan and youth support programs to secure funding, and to provide initial support to both university students and high school graduates, as long as the funds are not used for illegal purposes such as gambling.