Taxation reminder from Adam Smith
Dear respectable citizens of the Republic of Korea,
I’d like to start with a thank you to Koreans for two things. First, Koreans have proved my theory that the sum of individual desire to be well-off builds national wealth in a short period of time. Second, I appreciate the attention you all have shown me. So many Koreans who visit Edinburgh, Scotland, take a picture in front of my statue in the city center. Compared to tourists from other countries, Koreans have an overwhelming rate of not missing my statue. Their remarks are precisely correct as they check my name on the plaque. “Aha, the author of ‘The Wealth of Nations,’” they say. “The ‘invisible hand.’” Koreans just might be the most knowledgeable tourists ever.
But I find something quite strange. Why do you all mention the same two things: “The Wealth of Nations” and the invisible hand? I guess there must be a nationwide common sense test that all Korean students must take.
So it makes me even wonder how many of you haven’t actually read my book, but memorized it as a simple equation: Adam Smith equals “The Wealth of Nations” equals invisible hand.
Some other news has fanned my suspicion. It is the current controversy in Korea, the income tax issue that has arisen from year-end tax settlements. I heard that Korean economic officials have declared themselves dedicated anew to the “free market” and express a special affection for my theories.
But I think they haven’t read the four principles of taxation in my book. Either that or they have forgotten them. They are in the penultimate chapter of “The Wealth of the Nations,” so you may have missed them.
I have made a clear list of principles in the book. I’d like to remind my Korean friends that taxes should be: 1) fair 2) predictable 3) convenient to pay and 4) collected with minimal cost. But in the year-end tax settlement controversy, it is just not fair to add to the tax burden of salaried workers. The changes are too complicated for taxpayers to understand, and the paperwork is inconvenient and complicated. The social cost of the controversy and debate is excessive. None of my four principles has been observed.
Nowadays, nearly every country is struggling financially. During such a time, taxation based on principles is necessary. It is with the deepest affection that I send this reminder to my friends - the bureaucrats and politicians of Korea.
The author is a deputy national news editor of the JoongAng Ilbo.
JoongAng Ilbo, Jan. 29, Page 31
by LEE SANG-EON