The main opposition Democratic United Party seeks to raise the tax burdens for the top income bracket and conglomerates in an attempt to boost the government’s welfare resources by more than 20 trillion won ($1.8 billion) by 2017.
The move is regarded as the left-wing’s party attempt to compete with the progressive policies recently adopted by the ruling party.
“It was inevitable to increase tax for the rich in order to not to inflict burden on the majority of the population,” said Rep. Lee Yong-sub, the party’s policy committee chairman Monday.
“The ruling party’s past gestures to raise taxes for the rich have had little effect.”
The tax revenue ratio in 2007 was 21 percent but fell up to 19.3 percent last year under the Lee Myung-bak administration, he explained.
“Our plan is to raise the ratio to 21.5 percent by 2017,” Lee said.
“The measures aim at recovering the economic losses caused by the current government’s lopsided tax policies.”
The due change is expected to up the state’s annual revenue by up to 25 trillion won.
The leading liberal party is also examining the option of imposing property tax on large firms which own an excessive number of subsidiaries.
“The taxation system should be changed not only to impose extra tax to conglomerates but also to limit their expansion altogether,” said You Jong-il, DUP member and Korea Development Institute professor, on Sunday.
Lee’s idea of conglomerate tax, however, was met with disapproval within the party.
“The title ‘conglomerate tax’ carries a negative connotation and should be adopted under sufficient consideration,” said policy committee chairman Lee.
The DUP also set to reviving an equity investment ceiling system for the top 10 family-owned conglomerates and their affiliates.
The ceiling system, which was scrapped in 2009 in a bid to boost the economy, has recently been taken up by parties as a means to appeal to the public ahead of upcoming elections.
The ruling Grand National Party also resolved last week to impose extra sanctions on conglomerates in a bid to shake off its rich-friendly image and to appeal to the voters.
“The party will hereby drop the noninterference policies and reinforce the social responsibilities of large firms,” said Rep. Kwon Young-jin, member of the party’s reform panel.
“A fair market will never materialize, unless conglomerates discontinue monopolizing the market and infringing on the rights of smaller enterprises.”
The business circles, however, largely said that such restrictions would discourage investment and to dampen the nation’s competitiveness in the global market.
The DUP is to confirm its tax policy directions and announce them by early March at the latest, ahead of the April 11 general elections, according to officials.
By Bae Hyun-jung
(
tellme@heraldcorp.com)
