Bahk says taxing rich no solutionKorea’s top economic policy maker reiterated his opposition yesterday to politicians’ call to raise taxes on the rich and businesses in order to finance additional welfare programs.
Ahead of parliamentary and presidential elections scheduled for April and December, respectively, political parties are rushing to unveil a spate of welfare programs and campaign pledges, many of which policy makers see as “populist” and fiscally “unsustainable.”
Some lawmakers claim that Seoul needs to raise tax rates on the wealthy and large businesses to fund their ambitious welfare proposals.
“It would be a wiser taxation policy direction to expand the overall tax base - without raising tax rates - through ramping up transparency and economic growth,” Finance Minister Bahk Jae-wan said at a conference in Seoul.
“If we don’t want to follow in the footsteps of other advanced nations that have fallen into a welfare trap and fiscal crisis, we should not be forced to raise taxes by such excessive welfare programs.”
His opposition to a tax increase comes amid worries that such a move could undermine the nation’s growth potential by discouraging people from working and doing business.
“Tax rates should remain as low as possible, and tax codes should stay as simple as possible. Broadening the tax base and lowering tax rates is considered the textbook approach,” he said. Yonhap
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