[EDITORIALS]Taxes and bombs

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[EDITORIALS]Taxes and bombs

The government is now voicing its intention to keep on punitively “tax bombing” real estate.
Kim Byong-joon, the Blue House chief secretary for national policy, said at a symposium on Tuesday, “Some people are complaining that the comprehensive real estate tax has risen eight-fold, calling it a ‘tax bomb,’ but they have not seen a real one.” He seems to mean that people who own houses should head for their shelters because the government plans to expand the explosive power of its tax policy.
Such a rough and tough expression about taxes, a burden on the public, reminds us of President Roh Moo-hyun’s threatening remark, “Don’t look down on the Aug. 31 measures.” He was referring to new real estate policies introduced on that date last year. The president and his aide should be careful about making such threats.
The JoongAng Ilbo has long supported the view that property taxes should be raised and real estate transfer taxes should be lowered.
But we mean that such a reform is necessary to make the real estate tax system rational, and we don’t mean that the government should be allowed to be a tax bomber. It is wrong to make use of taxes in an attempt to curb home price hikes in specific areas of the country. A reform of the tax system should be used to improve the efficiency of the system.
As for the stabilization of real estate prices, it should be done by bringing supply and demand into balance. But the government is neglecting the expansion of housing supply and instead focusing on imposing punitively heavy taxes on owners of expensive homes.
And it is threatening the public in carrying out that policy. Even the former chairman of the presidential committee on tax reform has said it would be difficult to maintain the current real estate tax system.
Real estate policy can be changed according to the economic conditions ― and it should be. But Mr. Kim said firmly, “We have set things up to prevent the real estate policy from being changed during the next administration.”
That means that the administration has linked tax and real estate policies in complicated ways, making it difficult to adjust them. What an arrogant attitude the current administration has toward the public!
But when Mr. Kim made that remark, home prices were continuing to rise, led by prices in southern Seoul, according to a Kookmin Bank report released yesterday.

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