[EDITORIALS]Taking the easy way outThe Finance Ministry has announced that it will scrap tax relief for small households, ending additional tax deductions for single-member households and for married couples with no children.
According to the new policy, the tax burden on 4.7 million wage earners in the households with one or two family members will increase beginning next year.
But the ministry did not stop there: It also said it plans to scrap other tax benefits for local companies in order to raise funds for projects aimed at beefing up the social safety net and tackling such issues as the low birthrate and aging society. It seems that the government officially unveiled its intention to reduce tax benefits in order to collect more taxes.
But such changes in the tax system are not the right way to manage the nation’s budget. We all agree that we need to reorganize and reduce many tax deductions and tax breaks that have made the nation’s tax system ever more complicated. The tax system should be simple and concise so that any citizen can understand it and the tax collection process is made easy from not only the perspective of tax collectors but also from that of the taxpayers.
The simpler a tax system we have, the more effectiveness and fairness it will have and the less corrupt it will be. The countless tax benefits tucked into the nation’s tax system because of the demands of politicians and interest groups, which have made the tax system so confusing and complicated, should definitely be reorganized more coherently.
But the problem is that the Finance Ministry’s new tax measures were not intended to normalize the current tax system but were only aimed at collecting more taxes. As a result, the basic principles for reorganizing the tax system are nowhere to be seen, while the government’s intention to dig into the pockets of wage earners, whose incomes are more exposed than the self-employed, is seen very clearly.
Moreover, the idea of securing funding to tackle the low birthrate and the aging society by squeezing more taxes from local laborers is quite bizarre, and such a measure can never work.
Obviously the government prefers squeezing more taxes from wage earners to tightening its grip on high-income professionals and self-employed Koreans, who have long been suspected of dodging taxes by underreporting incomes. That leads us to believe that the government’s priority is just to collect more taxes as easily as possible.
We certainly need a revamp of our tax policies. But the overhaul should be dealt with in the framework of overall restructuring of our tax system.