DP's Lee bet big on universal basic income pledge, before backing off

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DP's Lee bet big on universal basic income pledge, before backing off

Ruling Democratic Party candidate Lee Jae-myung strikes a pose before the presidential debate on Fe. 25. [JOINT PRESS CORPS]

Ruling Democratic Party candidate Lee Jae-myung strikes a pose before the presidential debate on Fe. 25. [JOINT PRESS CORPS]

It wasn't long ago that the ruling Democratic Party's (DP) presidential contender Lee Jae-myung was described by foreign observers as the Bernie Sanders of Korea.
 
Born to a self-described “dirt spoon” family – borrowing a popular term that characterizes those who grow up without the advantage of family money – the former Gyeonggi governor’s personal story is a familiar one to the Korean electorate, who are frequently courted by candidates from major political parties with rags-to-riches tales.  
 
What makes Lee singular is how far he is willing to go with his vision of a more equal society.
 
During his first bid to win the DP’s presidential primary in 2017, which he lost to current president Moon Jae-in, Lee emphasized that hard work and talent allowed him to become a lawyer after years of toiling as a factory worker — but that is no longer enough in today’s Korean society.
 
Central to Lee’s vision is his proposal for a universal basic income.
 
During his tenure as mayor of Seongnam, Lee implemented a similar policy — dubbed a youth dividend policy — which paid 1 million won ($829) per year to 24-year-olds who had lived in the city for at least three years.
 
If elected president, Lee promises to expand the policy to the national level, starting with 250,000 won per year to all citizens, and gradually increasing the amount distributed to one million won by the end of his presidential term.
 
The candidate insists that such a universal basic income would not be the fiscal catastrophe critics claim, and that it would constitute only 3 percent of government spending in the initial stages.
 
Where the candidate has run into resistance, however, is his proposal to fund the rise in basic income distribution with property tax hikes.
 
At a press conference in July, Lee said his plan for a new land ownership tax of 1 percent on the value of privately-held land would collect 50 trillion won in new tax revenues per year to fund his universal basic income plan.
 
Lee argued at the time that the land ownership tax “should be imposed to realize the concept of land as a public good, shut off sources of income that require no labor and curb real estate speculation.”
 
Yet as nearly a million people were hit with comprehensive real estate tax bills this year, the idea of additional taxes has become politically toxic, and the candidate stepped back in November from the land ownership tax pledge – throwing the universal basic income pledge into doubt.
 
Speaking at a televised policy forum hosted by MBC on Jan. 6, Lee said that additional taxes to fund universal basic incomes would have to “receive the consent of the people.”
 
 
Much of the discussion over Lee’s economic policies has been overshadowed by Lee’s family problems and allegations of corruption among Lee’s acquaintances.
 
Although the DP candidate himself has been spared questioning by state prosecutors over the Daejang-dong residential development in Seongnam, which began in 2015 during his mayoral term, Lee has faced unending speculation, and accusations, that he played a role in the project’s shareholder composition and profit distribution scheme, which allowed previously little-known asset management company Hwacheon Daeyu rake in a profit of 57.7 billion won ($48.3 million) since 2019 on an investment of 49.95 million won, a 1 percent stake in the mixed public-private development consortium.
 
Lee vigorously defended himself at a parliamentary audit of the Gyeonggi provincial government in October, arguing that while he designed the Daejang-dong development, he set it up with “a fixed profit distribution scheme so companies that lobbied [the city] couldn't run off with large amounts of money” and “made sure that large financial institutions were involved.”
 
Prosecutors have already arrested and indicted Lee's former campaign aide Yoo Dong-gyu, who served as the Seongnam Development Corporation’s acting president as the project was formulated, along with Kim Man-bae, a former journalist and owner of Hwacheon Daeyu who interviewed Lee back in 2014.
 
As the presidential race heated up this past winter, Lee’s family affairs came under public scrutiny, with Lee being forced to apologize for past misdeeds by both his eldest son and wife.  
 
The candidate said he “failed as a parent to properly teach my child” after a December media report revealed his 29-year-old son had engaged in illegal gambling on multiple occasions from 2019 until last year.
 
Then, both Lee and his wife, Kim Hye-kyung, issued separate apologies for Kim’s ethical lapses during the DP candidate’s gubernatorial term, which involved having civil servants run personal errands and using a government-issued corporate card to pay for private expenses.  
 

BY MICHAEL LEE [lee.junhyuk@joongang.co.kr]
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