"National Basic Income of 1 Million KRW per Year for All Citizens and 2 Million KRW for Youth"…What Do You Think of Lee Jae-myung's Basic Income Plan?

Lee Jae-myung "Universal Basic Income of 1 Million Won for All Citizens... Funded by Land Ownership Tax and Carbon Tax"
"Like Scattered Cherry Blossom Petals" Tax Distribution Plan"... Fierce Attacks from Ruling and Opposition Presidential Candidates
Experts "Populist Pledge... May Increase Burden on Citizens"

Lee Jae-myung, the Democratic Party of Korea's presidential primary candidate and Governor of Gyeonggi Province, is holding a policy pledge press conference via video conference at the National Assembly Members' Office Building video conference room on the 22nd. [Image source=Yonhap News]

[Asia Economy Reporter Heo Midam] "Basic income is still unfamiliar, but the more the public understands its content, the more they empathize with its necessity."

Lee Jae-myung, the Democratic Party presidential candidate and Governor of Gyeonggi Province, announced on the 22nd a basic income pledge to provide young people with 2 million KRW per year and all other citizens with 1 million KRW per year in local currency. Lee plans to fund the basic income by imposing a land holding tax to block unearned income from real estate and a carbon tax to overcome the climate crisis.

This pledge has sparked controversy within the political sphere. Critics argue that the feasibility of securing the funds is low and that the introduction of new taxes could increase the burden on citizens. Experts have criticized the basic income pledge as a typical 'populist pledge' aimed at winning voters' support.

On the same day, Lee held a press conference at the National Assembly Communication Office and announced, "During the next government's term, we will provide young people with 2 million KRW and all other citizens with 1 million KRW in basic income annually."

The core of the pledge is to start by paying all citizens 250,000 KRW once a year from 2023, the second year of the administration, and increase it to more than four times a year to pay 1 million KRW annually within the term. For youth aged 19 to 29, an additional 1 million KRW youth basic income will be added to the general basic income, totaling 2 million KRW per year.

If Lee's pledge to pay 1 million KRW to all citizens (52 million people) is fulfilled, it would require an annual budget of 52 trillion KRW. Adding an extra 1 million KRW for about 7 million young people would require an additional 7 trillion KRW, totaling approximately 59 trillion KRW. This amount exceeds this year's national defense budget (53 trillion KRW) in South Korea.

Regarding concerns about funding, Lee stated his intention to introduce new tax items such as land holding tax and carbon tax along with tax reform. He also explained that at least 25 trillion KRW could be secured through budget cuts and prioritization.

Yoon Hee-sook, member of the People Power Party. [Image source=Yonhap News]

In response, presidential candidates from both ruling and opposition parties criticized the pledge. Former Democratic Party leader Lee Nak-yeon said, "It should be called a youth allowance, not basic income," adding, "Naming it basic income has political intentions." Former Prime Minister Chung Sye-kyun also pointed out, "Basic income is the same idea as taking national budget meant for socially vulnerable groups and distributing it to the wealthy."

Yoon Hee-sook, a member of the People Power Party, also criticized the basic income pledge, saying, "'Sprinkling taxes like cherry blossoms fluttering on a spring day' is what this means," and added, "Looking at the plan on how to use such huge funds, I think it is unrealistic for Lee to run the country directly."

Currently, no country is fully implementing basic income. Finland introduced basic income in 2017 by paying 730,000 KRW monthly to 2,000 long-term unemployed people, and at the same time, Ontario, Canada, conducted an experiment paying 1.15 million KRW monthly to 4,000 low-income people for three years. However, the experiments were discontinued as basic income reduced people's motivation to work and funds were quickly depleted.

Earlier, Switzerland also held a referendum in 2016 proposing to pay 3 million KRW monthly to adults aged 18 and over, but it was rejected by 76.7% of voters.

Concerns are also voiced among citizens. Kim (26), an office worker, said, "I read articles about the national debt continuously increasing, and if basic income is given in this situation, the burden on future generations will only grow," adding, "Lee should consider more reliable ways to secure funding."

Experts pointed out that Lee's basic income pledge is a strategy to win voters' support. Kim Tae-gi, a professor of economics at Dankook University, said, "The basic income pledge is nothing more than a winning strategy. It is a typical populist pledge," adding, "The per capita national income exceeds 30,000 USD (about 35 million KRW). Is it appropriate to call 1 million or 2 million KRW 'income'? The term 'income' itself does not apply."

He continued, "The land holding tax Lee mentioned as a funding method is no different from the real estate holding tax," criticizing, "We are already imposing taxes, and just changing the name to create a new tax item will only increase the burden on citizens."

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