Tax hike not the answerEarned income tax for salaried workers will increase by a large margin. According to tax rates for 2007 announced by the government, when an annual salary increases by 6 percent, earned income tax will jump by more than 10 percent. People who earn small salaries will have to pay more in tax. In particular, single people and married couples with no children need to pay more in tax. The earned income tax for a single person with a monthly income of less than 2 million won, or $2,100, will increase by 46 percent.
That is because income deduction will be abolished this year. Because of this measure, 4.3 million people need to pay more in earned income tax. Another reason for the surge is that despite the increase in income, the tax base has remained the same since 1996. The number of people who earn annual salaries between 40 and 80 million won, and thus need to pay 26 percent according to the tax base, has increased from 50,000 to 260,000 during that period.
More than 13 trillion won is expected to be collected in earned income tax revenue this year. Since the incumbent government entered office, the revenue will have increased by 81 percent. During the same period, the composite income tax of self-employed people has increased by 21 percent. That is why people complain that the government lives off salary earners. Three out of four salaried workers say they pay tax reluctantly, or they feel that their money is taken by force, according to a survey conducted by the Korea Institute of Public Finance. The government raises earned income tax for the convenience of administrative work. The government can collect tax from people who receive money more easily without much resistance. That’s why the government toys with the tax whenever it needs money desperately. Salary earners are the middle class, the backbone of our society. If they suffer from taxes that are too heavy, our society and economy lose vitality.
Nevertheless, the government has started massive projects, such as welfare programs and pay increases for civil servants totaling 5 trillion won. The government squeezes the pocket of salaried workers and patronizes the people with that money. The government should lower tax rates for earned income or change the tax base to ease the burden on salary earners. The National Assembly must carry out its duty for this job. The government should cut excessive expenditures and collect a fair tax from the self-employed with high incomes.
More in Editorials
Hong learns a lesson
Appointing a special prosecutor
The BAI’s independence
No emotional control
Cracks in the alliance