[FOUNTAIN]Mustaches and homesPeter the Great of Russia was the monarch who transformed Russia into a modern, Westernized nation through mercantilist reform and industrial reconstruction. He was also a ruler who could be considered the father of “tax bombing.” In order to raise the necessary funds for reform and a military buildup, he invented various excuses to collect taxes.
He introduced a laundry tax for doing one’s washing, hats and boots taxes for wearing them and a watermelon tax for buying and eating watermelon. The most obscure tax of all was his mustache tax. Peter the Great was, in fact, promoting reforms in mustaches, claiming that the aristocrats’ custom of wearing them was outdated. The aristocrats, who valued utility over appearance, shaved their mustaches altogether, and the mustache tax was abolished soon. While the measure failed to increase tax revenue, it successfully accomplished the reform of one custom.
In Japan, talk of introducing a “singles tax” was controversial. The birth rate stubbornly resisted efforts to raise it, so some politicians proposed the tax, to be imposed on singles so that delaying marriage would be penalized and the birth rate would increase. The proposal was dropped when others argued a new tax would have no effect without attacking the fundamental causes that discourage births.
The additional real estate tax, which is to be collected in Korea beginning from December, has created a great stir here. Some have to pay taxes on properties that had been exempt so far, or have to pay several times the usual amount. These people complain that they are being punished for owning property. In newspaper commentaries on the tax, others wrote that they would still rather own an apartment in the expensive Gangnam area no matter how high the tax was, calling the owners’ complaints “happy agony.”
The additional real estate tax cannot be compared to nonsensical taxes such as the mustache tax or singles tax. Imposition of a tax based on reasonable standards, appropriate tax rates and proper procedures are in accordance with tax justice. But the administration might need to acknowledge its mistake of failing to review the effect of the tax thoroughly. It failed to realize that the tax increase will be quickly translated into real estate price hikes. The apartment owners in Gangnam will laugh at the tax bill, knowing that their apartment’s price is rising at a rate of several times the tax increase. That is the reality of the market and psychology that the policy makers of this administration have emphasized so many times.
*The writer is a Tokyo correspondent of the JoongAng Ilbo.
By Yeh Young-june
with the Korea JoongAng Daily
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