Lee Jae-myung Urges Government Again to Introduce 'Disaster Basic Income'... Why?

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Lee Jae-myung, Governor of Gyeonggi Province, diagnosed the current economic situation triggered by COVID-19 as an emergency and once again urged the government to introduce a 'disaster basic income.'

He explained that the appropriate amount for the disaster basic income payment is 1 million KRW per person, and the payment method should be local currency rather than cash. Regarding the funding concerns raised by some, he added that in the short term, it is possible by adjusting existing revenues, and in the mid to long term, by raising the land holding tax, which is a source of excessive unearned income, to the level of the Organization for Economic Cooperation and Development (OECD).

On the 12th, through Facebook, Governor Lee said, "Regarding the current situation in South Korea, Hwang Kyo-ahn, leader of the United Future Party, stated that the economic situation is almost equivalent to wartime emergency, and bold measures such as disaster basic income would be highly effective for the economy. Kim Yong-tae also said, 'If it is a tax cut, I agree with a tax cut of more than 1 million KRW per person.' This shows that the current economy is serious enough to require disaster basic income."

Governor Lee proposed 1 million KRW per person as the amount for disaster basic income.

He said, "Kim Yong-tae mentioned that a tax cut of more than 1 million KRW per person is necessary as an economic recovery policy at this time. If a tax cut of 50 trillion KRW is possible, it means that basic income can be paid with tax revenue before the tax cut of 50 trillion KRW," and assessed, "Considering our economy and budget size, this amount is manageable."

He also pointed out that it should be a payment, not a tax cut.

Governor Lee stated, "Tax cuts benefit only taxpayers and companies, so the effect on economic revitalization is less than supporting everyone. It is common sense, even without Paul Krugman's argument, that paying cash to all citizens, including the many struggling lower-income people, is more helpful for economic revitalization than tax cuts for specific groups."

Furthermore, he criticized, "Tax cuts are a regressive tax policy where high-income earners or wealthy individuals receive more benefits, which violates tax justice. This is also why political groups based on a small privileged class advocate tax cuts as an economic revitalization policy."

Governor Lee also made it clear that disaster basic income payments should be for all citizens, not just some.

He said, "If taxpayers and beneficiaries differ, tax resistance and policy resistance occur, so cash payments should be made to all citizens, not just some poor people. Excluding groups that already pay more taxes due to higher income and assets from beneficiaries is double taxation and reverse discrimination."

His theory is that it is easier and more economically effective to give benefits to everyone and then selectively collect additional taxes from some, rather than selectively giving benefits to some.

Governor Lee was optimistic that sufficient funding for disaster basic income can be secured.

As a short-term funding plan, he said, "By adjusting existing revenues, basic income payments can be made without increasing the national burden. The budget is just a matter of priority; reducing unnecessary and non-urgent budgets and adjusting budgets less efficient than basic income to create 50 trillion KRW is a matter of will, considering our budget size."

As a long-term alternative, he added, "Raising the land holding tax, a source of excessive unearned income, to the OECD average level can secure 20 to 30 trillion KRW. Also, by introducing earmarked taxes such as robot tax, data tax, and carbon tax in new industrial sectors with ultra-high returns on investment, which are used only for 'basic income,' funding can be secured without difficulty. Since all taxes are evenly refunded to the people, tax resistance will be minimal."

Finally, Governor Lee argued that disaster basic income should be paid in time-limited local currency, not cash that can be saved.

He suggested, "Japan's helicopter money was distributed in cash during an extremely depressed consumption state, but it did not lead to consumption and had little effect on economic revitalization. However, disaster basic income should be paid in local currency that must be used within a certain period to induce full consumption. For areas without local currency, time-limited Onnuri gift certificates can be issued."

Governor Lee concluded by urging the government, National Assembly, and political parties to urgently introduce a disaster basic income of 1 million KRW per person temporarily to revive the halted economy and save the lower-income economy on the brink of collapse, saying, "Due to COVID-19, the domestic economy is in a catastrophic crisis, and many lower-income people are in difficult situations."

This content was produced with the assistance of AI translation services.