[Tax Story] Let's Lead Korea's 'Belle ?poque (Beautiful Era)' with Taxes

"Present the diagnosis, prescription, and eradication methods for the novel coronavirus infection (COVID-19). Failure to solve this means risking lives." This new infectious disease demands life-or-death solutions from countries and their citizens worldwide. The motivation behind this challenge is said to be human arrogance and rudeness. It is far more difficult than the unsolved problems in mathematics. Countries are pooling their best minds and making every effort to find answers.

Regarding the midterm exam equivalent?diagnosis and prescription?South Korea is the only country among the Group of Twenty (G20) with daily confirmed cases at around ten. This is an answer sheet worthy of an A+ grade. This is not self-praise but an evaluation from influential media such as the British BBC. They urge, "If Korea can solve it, why can't our country present a model answer?" In fact, no one expected the United States, Europe, and Japan to struggle so much.

South Korea’s ability to prepare such answers is believed to be the result of a high level of civic awareness developed through industrialization and democratization, an advanced health insurance system, the dedication and passion of expert groups centered on the Korea Disease Control and Prevention Agency, the sacrifice and service of medical staff such as doctors and nurses, and the kind-hearted nature of caring for neighbors.

Though we may have overlooked it, signs of this were already present. BTS has long been an icon of global youth culture. The film "Parasite" swept international film festivals. Remote classes and elections conducted amid COVID-19 are at a level other countries dare not approach.

While the Korea Disease Control and Prevention Agency leads problem-solving, taxes must handle the aftermath. Taxes are also being asked to take a path never traveled before. "Distribute to each person as needed," ensuring no relative deprivation. It is required not only to collect taxes faithfully according to the principle of income redistribution but also to simultaneously perform a different task of supporting struggling taxpayers with those taxes.

However, unlike tax cut policies, there is no reason to hesitate in disaster relief payment policies because their effects are clear. If tax cuts are given to the wealthy, they might use the money to pay off debts or speculate in real estate, but if disaster relief funds are provided via cards, the money flows back into the market. This is the so-called "fountain effect." Considering the tax burden rate is about 20%, 20% of the support funds return to the treasury as taxes, providing some leeway in resource mobilization. Also, the participation of good taxpayers in the top 30% in donation campaigns will play a role. It is necessary to reform the donation tax system so that the line of donors is as long as the line for purchasing masks.

Every country has a beautiful era it wants to boast about, the "Belle Epoque." British historian Mary McAlpin said that a nation's adversity can rather break old customs and provide the driving force for a burning desire toward something new.

Looking up briefly from the smoky battlefield of COVID-19, only South Korea seems to be advancing. The driving force is likely the strength that has overcome all kinds of adversity over the past 5,000 years.

The midterm exam problem of diagnosis and prescription has been almost perfectly solved. The final exam problem of vaccine and treatment development remains, but I have no doubt that the capabilities of South Korea’s youth will provide a satisfactory answer.

South Korea, which seemed destined to live meekly overshadowed by neighboring powers, is proving itself a strong nation through the COVID-19 crisis. The generation that experienced COVID-19 wants to be recognized as having lived in South Korea’s Belle Epoque, the most beautiful era. We look forward to the revitalization of taxes.

Changnam Ahn, Professor, Department of Economics and Taxation, Kangnam University

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