[EDITORIALS]Not the way to cut taxesUnder the tax revisions announced by the government yesterday, the income tax burden on small households of one or two persons and on dual-income families would likely increase, while families with many children will receive more tax incentives.
With the low birth rate being a nationwide problem, easing tax pressure on families with multiple children is a good move. The problem is that to alleviate the burden on such families, the government had to shift the pressure onto smaller families.
There are 4.3 million salary workers whose taxes will increase with the latest tax revision bill. Combined, they will have to shell out 550 billion won ($570 million) more in taxes per year. Some of them must be in a financial state in which they cannot afford to raise children and both the man and woman in a married couple must hold down full-time jobs to make ends meet. They will find it hard to accept that they will have to pay more taxes than they already do.
The 550 billion won in extra taxes could have been covered by the government without making life difficult for 4.3 million people. This “big” government has indiscriminately launched state-run projects, costing trillions of won, and has raised the labor cost for civil servants by 5 trillion won. For this administration to be asking to collect 55 billion won off smaller families is ludicrous.
A total of 2.2 million salary workers would see their taxes fall, but only by 270 billion won. Thus, wage earners as a whole will not benefit from the tax revision bill. There is little wonder, then, that salary workers complain that they seem to be an easy target for government policies. Before placing a greater burden on smaller households, the government must first restructure its finances, and collect more taxes from self-employed people and professionals in high-income brackets.
What’s more worrisome is that the government’s tax-increase plans, which were met with stiff opposition from the public earlier this year, could re-emerge. The ruling Uri Party has called the government’s long-term financial management plans, termed “Vision 2030,” essentially a scheme to increase taxes.
The official announcement of the plans, initially scheduled for tomorrow, has been postponed until next Wednesday. The government must keep in that mind raising taxes will not be an easy task.