Cute won’t cut itThe ruling Democratic Party’s Chairwoman Choo Mi-ae chose a weird combination of words to describe the controversial plan to raise taxes being pushed by President Moon Jae-in, who is pursuing expansive plans to meet his campaign promises. Regarding the tax hikes, she called them an “honor tax” for the conglomerates and very high income earners to preserve their dignity. The strange name campaign continued all day long. Woo Won-shik, floor leader of the DP, called the hikes a “normalization of government taxation,” while its policy committee head Kim Tae-nyeon dubbed the hikes a “love tax” or “respectful tax.”
After declaring a new agenda — levying more taxes on the rich and big companies to fund the president’s vows — the Moon administration has launched a war for public support by underscoring that the tax increases are aimed at the privileged class. It is regrettable and worrisome that a tax debate takes an alarming turn toward populism and away from balanced tax reform.
The government can try to use gimmicky, emotional terms to describe its move, but that doesn’t alter the essence of the issue: this is a tax hike targeting the wealthy and conglomerates. Success of the tax debate hinges on how much consensus the government can draw from taxpayers. The debate must start with a thorough and comprehensive review of possible repercussions over the long term.
In any case, the government and ruling party must avoid arm-twisting a specific class or group — not to mention demanding sacrifices from them — to achieve their policy goals. They must not turn a blind eye to mounting criticism that their tax plans are pure populism. Previous administrations’ repeated attempts to collect more taxes through this method went nowhere.
Given the low birthrate of Korea and the rapid aging of our population, it is unavoidable for the government to collect more taxes than before. No one can deny the need for our society to move toward a mid-level welfare state with moderate tax increases. We can no longer be a low-level welfare state with low taxes. But it is dangerous for the government to selectively make the rich pay their dues, while reassuring the majority that they don’t have to worry at all.
Any tax hike demands a revision of the tax code by the National Assembly. If the administration does not get opposition support and insists on a propaganda war to divide the nation, it will trigger vehement public resistance.
There is no easy way for a government to increase tax revenues. Any attempts to avert a public uproar through cutesy wordplay will backfire. The administration must persuade the public of the need for tax hikes and reach a social consensus.
JoongAng Ilbo, July 25, Page 30