Is 1 Billion Won a Major Shareholder? Kim Byungki Calls for Review, Joo Jinwoo Criticizes "Experimenting on the People"

Democratic Party Hints at Reconsidering Major Shareholder Criteria
Joo Jinwoo: "A Clumsy Announcement Led to a Sharp Stock Price Drop... It Was Incompetent"

"Is the government conducting experiments on its own people?"

On August 1, just one day after the announcement of the tax reform plan, Joo Jinwoo, a member of the People Power Party, sharply criticized the ruling party for hinting at a reconsideration of the "major shareholder" criteria. He pointed out that the stock market dislikes uncertainty, and after a poorly executed policy announcement caused 116 trillion won in market capitalization to evaporate, the government changed its stance once again.

Representative Joo Jinwoo, who declared his candidacy for the leader of the People Power Party, is giving an interview to Asia Economy at the National Assembly on the 28th. Photo by Kim Hyunmin

Joo Jinwoo made these remarks on his Facebook post that day, stating, "The stock market hates uncertainty, and tax policies should not fluctuate back and forth."

He said, "The tax reform plan, which clumsily announced the strengthening of the 'major shareholder' criteria for stock capital gains tax from 50 billion won to 10 billion won, led to a sharp drop in stock prices." He continued, "The announcement triggered a sell-off, causing the KOSPI to plummet by 3.9%. In just one day, 116 trillion won in market capitalization was wiped out," highlighting the situation in the stock market that day. He also criticized the government and the ruling party for the KOSPI's sharp decline, saying, "Stock-related tax policies should not be changed recklessly, as this undermines policy consistency. Investors need to be able to trust government policy."

In particular, Joo also mocked Kim Byungki, the floor leader of the Democratic Party, for announcing a reconsideration plan just one day later. He said, "Startled by the stock price crash, Democratic Party floor leader Kim Byungki announced a reconsideration plan in just a day," and questioned, "Is the government experimenting on its own people?" He went on to say, "The same applies to the Yellow Envelope Law and amendments to the Commercial Act. If you rush to make unilateral amendments and later regret the negative impact on the economy, it will be useless."

Amid concerns over the tax reform plan, the stock market plunged from the opening. Even within the Democratic Party, there were growing calls to reconsider the tax increase plan, which runs counter to President Lee Jaemyung's capital market revitalization policy.

Lee Soyoung, a Democratic Party member of the KOSPI 5000 Special Committee, wrote on Facebook, "The major shareholder capital gains tax has already been criticized for causing unnecessary market distortions at the end of the year, and it is questionable whether someone holding 1 billion won in stocks can truly be considered a major shareholder." She argued, "This does not fit with the government's policy of redirecting funds from real estate to stocks." Lee Eonju, another senior member of the Democratic Party, also issued a statement that day, saying, "There is little effect on tax revenue, so what is the reason for unnecessarily lowering the major shareholder capital gains tax threshold?" She emphasized, "There should be no action that renders President Lee Jaemyung's KOSPI 5000 pledge meaningless."

Eventually, floor leader Kim Byungki also moved to calm the situation via Facebook immediately after the market closed. He stated, "We will review the possibility of raising the 1 billion won major shareholder threshold, focusing on the KOSPI 5000 Special Committee and the Tax Normalization Special Committee within the party," and added, "Through close cooperation between the party and the government, we will focus on restoring investor confidence."