[EDITORIALS]‘Glass purses’ tapped again

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[EDITORIALS]‘Glass purses’ tapped again

The government has set its target for next year’s individual income tax revenues from wage earners at 12 trillion won, up 26 percent from this year’s goal. The increase is six times higher than the expected 4.6 percent growth in total tax revenues next year over this year. Accordingly, wage earners will account for a larger part of total tax revenues and the weight of their tax burden will be proportionately heavier next year.
The Ministry of Finance and Economy explained that it had raised its forecast for income tax revenues from wage earners so sharply because it expected that wages would rise and the number of employed persons would expand as the domestic economy recovered. The ministry added that an individual wage earner would not see his tax burden increase suddenly because the government has not raised income tax rates on wage earners and did not widen the range of taxable income. If a wage earner sees a tax increase, it will have resulted from an increase in his wages, so he has no reason to complain, according to the ministry.
But wage earners, who see taxes withheld from their salaries every month, are uneasy at the government’s forecast for an increase in tax revenues from wage earners. There is a saying that wage earners’ purses are “glass purses;” their incomes are more transparently revealed than any other taxpayers in the nation. Only a small percentage of the income of small business owners and self-employing professionals is captured by the tax authorities, compared to incomes of wage earners. Every year, the government pledges to raise tax compliance to achieve fair taxation. But the conditions have not changed much, even though the administration has been replaced. Wage earners are feeling discriminated against.
In addition, half of wage earners, whose incomes are below the tax exemption point, do not pay income taxes. The burden falls on the shoulders of the other half of wage earners. In such conditions, whenever a proposal for a tax cut is made, the government and the governing Uri Party make a great fuss, saying that only high-income earners would benefit from a tax cut. Rather than appreciating wage earners, who work hard to make those high incomes and so pay high taxes, the government is treating them as tax-paying machines.
The government should not merely talk about a “low tax rate and broad taxation,” but should put it into practice. That would be the first step toward fair taxation and meeting the government’s duty to wage earners, who have quietly bolstered the nation’s finances.
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