Wage tax rates soar for people without kids

The government this year will raise the wage tax by as much as 60 percent on couples who don’t have children while giving breaks to married couples with kids.
In an effort to tackle the low birth rate, Korea’s Finance Ministry yesterday confirmed its 2007 tax rates.
Under the new policy, which took effect Wednesday, the monthly wage tax on a single person who earns 3 million won ($3,181) a month will increase 9.8 percent to 158,000 won a year if the salary remains unchanged.
Also, childless married couples with the same salary will see their taxes rise 5.2 percent to 144,000 won, while married couples with two children and the same salary will see their taxes dip 7.2 percent, to 92,000 won.
The tax burden declines by 25.2 percent to 63,000 won for married couples with three children, the ministry said.
However, the figure changes dramatically with a 6 percent raise, the average amount predicted by the government for company workers this year.
If a household with a 3 million won monthly income gets a 6 percent raise this year, the tax burden will rise 28.2 percent, while that on a childless married couple with both spouses working surges 60.3 percent, from 22,540 won a month to 36,130 won, the Finance Ministry said.
Taxes will shrink by 2.1 percent, however, for four-children households with both parents working.
“This is simply outrageous,” said Jennifer Kim, a 28-year-old ad agency representative in Seoul. She is single, making about 30 million won a year. “The government is nudging us to get married by punishing us with this excruciating tax rate. But we will never be able to save enough money to get married with all these unbearable tax burdens.”
The government is expected to reap 550 billion won in additional taxes by lifting various tax breaks for singles and childless couples with both spouses working, but the tax breaks for households with children are worth only 270 billion won.

By Jung Kyung-min(JoongAng Ilbo)/ Jung Ha-won(Staff Writer) [hawon@joongang.co.kr]