Tax Plan Helps Spread Wealth

The Korea Chamber of Commerce asked the Finance Ministry on Friday to give conglomerates a tax cut if they settle a certain percentage of their payments to small and midsize firms in easily negotiable instruments, like bills of exchange. According to the chamber's plan the conglomerates would qualify for a 10 percent tax break. The chamber wants transactions between large firms also included in the plan.

It said conglomerates tend to pay each other in less-liquid corporate notes, which are then often used as payments to smaller firms. This keeps the plan from achieving its goal, namely preventing chain-reaction bankruptcies at small businesses, it said. "Big firms still pay small firms with business notes, so we need the plan expanded," said the chamber's executive director, Lee Hyun-seok.