Basic Income 'Pandora's Box' Opened... Major Transformation of Tax and Welfare Systems

Following Chairman Kim Jong-in, Representative Ahn Cheol-soo also calls for "Exploring Korean-style Basic Income"
Ruling party proposes purpose taxes like land holding tax and robot tax for basic income

[Asia Economy Reporter Park Cheol-eung] Discussions on basic income are emerging across party lines. If the economic effects of the disaster relief funds, which can be used until August, are verified, discussions on additional payments are expected to become more active. However, the introduction of basic income requires a funding plan as a prerequisite and implies a major transformation of the national welfare system, making intense political debates between ruling and opposition parties inevitable regarding the direction.

On the 4th, Ahn Cheol-soo, leader of the People’s Party, publicly raised the issue of basic income by stating at the Supreme Council meeting, "We will consider and explore a Korean-style basic income system." This was Ahn’s first public stance on basic income, and he presented a specific model based on John Rawls’ theory of justice, which holds that when social inequality exists, the government’s available welfare resources should be prioritized for disadvantaged groups. It appears he is considering a plan to provide payments only to vulnerable groups.

The previous day, Kim Jong-in, emergency committee chairman of the United Future Party, sparked the basic income discussion by saying, "Maximizing the material freedom to buy bread is the fundamental goal of politics." Former Seoul Mayor Oh Se-hoon, who opposed free school meals, is also reportedly opening a policy research institute to review basic income.

As the opposition parties initiate basic income discussions, the government and ruling party are showing cautious positions. A Blue House official told reporters the day before, "Basic income means giving unconditional monthly living expenses to all citizens, so there needs to be much discussion." A member of the Democratic Party also said, "Right now, passing the third supplementary budget in the National Assembly is an urgent matter, so it is not easy to discuss basic income immediately." This is interpreted as a cautious attitude due to many practical hurdles.

Nonetheless, it can be said that the first steps toward broad basic income discussions have begun. On the same day, Democratic Party lawmaker Kim Du-kwan appeared on KBS Radio’s 'Kim Kyung-rae’s Strong Current Affairs' and said, "Since Emergency Chairman Kim Jong-in proposed it, discussions are inevitable and will probably burst forth like a flood." He also advocates additional disaster relief payments. Regarding timing, he said, "It is difficult to predict," but tentatively suggested August or early September.

Analyses by some credit card companies have confirmed increases in self-employed sales through disaster relief funds. Within the ruling party, there are calls to analyze the economic effects at the government level after the usage period ends in August and then consider additional payments based on that. However, another Democratic Party lawmaker said, "It is too early to discuss additional disaster relief payments immediately, and if the effects are sufficiently proven after usage until August, then it should be reviewed at that time."

Permanent basic income is a matter of a different dimension from temporary disaster relief funds. The core issue is how to secure funding. Gyeonggi Province Governor Lee Jae-myung, who strongly advocates for basic income introduction, proposes increasing land holding tax and introducing new purpose taxes for basic income such as robot tax, data tax, and carbon tax. He suggests covering funding through new taxes.

On the other hand, conservative opposition parties emphasize fiscal soundness and are negative about tax increases. On the same day on KBS Radio, United Future Party lawmaker Yoon Young-seok said, "There could be situations where basic income exceeds revenue," adding, "It was implemented and then abolished in Finland, and 77% of the Swiss population opposed it, leading to its abolition. If the political circles move too fast, there is a risk of disappointing the public, so a cautious approach is necessary." This is why there are calls that discussions should be linked with a re-examination of the existing welfare system.

Leader Ahn Cheol-soo said, "An objective analysis of our country’s welfare system is necessary. It has the characteristic of ‘low burden, high benefit,’ meaning the system provides much more than what is paid in," and added, "In this situation, experts point out that introducing so-called 1/n style basic income distributed evenly to all citizens would damage the national fiscal capacity and make it difficult to reduce income inequality."

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