A critical lack of philosophy
The recent controversy over the year-end tax settlement has revealed the “lack of philosophy” in Korean politics. The origin of the problem is the current administration’s principle of welfare expansion without tax increases, which simply does not make sense. In order to expand welfare benefits without raising taxes, we should either borrow money or find an oil field in the East Sea. But President Park Geun-hye seems to firmly believe that increasing welfare without raising taxes is possible, and no one knows why. It is pathetic to see the government trying to increase its tax revenue without raising taxes. It has used embarrassing justifications like reinforcing the fairness of taxation by converting income tax deductions into tax credits or raising cigarette prices to promote national health.
When the ruling and opposition parties revised the tax law to convert income tax deductions into tax credit in late 2013, they knew that it was practically the same as raising taxes. The Democratic Party demanded to lower the highest income tax bracket from 300 million won ($274,400) to 150 million won. The ruling and opposition parties have been more interested in the scope of the tax increase, and they didn’t object to the tax increase itself.
But both parties are making a fuss now that the year-end tax settlement has become an issue. The Saenuri Party is brazen. If it is a conservative party, it should have pursued selective welfare. But it created the source of this calamity by making welfare promises to win votes in 2012. Now that financing the welfare expansion has become a problem, it is arguing that such programs should be scrapped. If they really have no intention of keeping promises, they must apologize to the citizens.
The New Politics Alliance for Democracy (NPAD) is cowardly. Tax credit is disadvantageous to high-income earners and advantageous for low-income earners. It is a kind of “tax on the wealthy” that the opposition party advocates. The people hit hardest by the newly revised year-end tax settlement plan are those who make more than 55 million won. According to the National Tax Service’s statistics, this group makes up the top 18 percent of the 16.35 million workers who filed their tax settlements last year. Those who make more than 40 million won make up the top 25 percent. Those who are paying significantly more taxes are the high-income group. If the NPAD is really a progressive party, instead of berating the government, it should argue that added tax burdens on high-income earners may be inevitable to expand welfare benefits.
The Saenuri showed its lack of principles by announcing a plan to retroactively apply the year-end settlement. Does the ruling party plan to offer a tax cut whenever taxpayers resist? It is pitiful that the conservative party destroyed the legal principles, and the opposition party is playing along.
The author is a deputy political and international news editor of the JoongAng Ilbo.
JoongAng Ilbo, Jan. 31
by KIM JUNG-HA