Tax tangle

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Tax tangle

A day after a revision to the real estate tax law was announced, the government and the ruling party plan to revisit it.

They decided earlier to raise the tax threshold from 600 million won ($530,000) to 900 million won, but are now considering scrapping the plan.

That is because some Grand National Party lawmakers oppose the revision, as they are conscious of the public view that the revision would ease taxes too much.

The Grand National Party says it will release a revised version after policy debates and a meeting between the party and the administration. The party earlier said it would correct the populist taxation system.

But it’s the party that’s now being dragged along by populism.

The revision of the law on comprehensive real estate taxes was one of the most important pledges made by the GNP in the presidential and general elections. The government and the GNP debated the issue several times, reached an agreement and produced the final revision that they announced.

But even after the revision was released, the party chairman says one thing and floor leaders of the party another and other lawmakers have different opinions, according to their constituencies’ interests.

While the GNP is discussing the new version, the Blue House and Kang Man-soo, the minister of strategy and finance, say that the government’s bill remains unchanged.

The people don’t know whom to listen to. This from a government that had an overwhelming victory in the election and a ruling party that holds a majority in the National Assembly.

Even though the comprehensive real estate tax was introduced on the back of populism, it is clear that revising it wouldn’t be easy at all. The administration should have had sufficient debates in the process of revising the law, and discussions with the party, before releasing the revision bill.

Confusion could have been avoided if they had decided to reduce the taxes gradually on the premise that they would ultimately be integrated into property taxes. It will be difficult to persuade the opposition and the people on the new bill, given that the ruling party members themselves are unconvinced.

The ruling party can’t faithfully play its role as the majority party, nor gain support from the people, with a lax attitude that it can release an illogical and unprincipled bill and then take it back in the face of opposition and criticism.
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