野 "Tax Cuts for the Wealthy" vs. Ruling Party's "Politics of Division": Clash Over Corporate Tax Cuts and Yoon Government's Economy

People Power Party "Opposition's Anti-Business Policies and Dividing the People"
Democratic Party "Yoon Government's Economic Policy Direction, Tax Cuts for the Rich"

Kim Seong-hwan, Chairman of the Policy Committee of the Democratic Party of Korea, is attending the Policy Coordination Meeting held at the National Assembly on the 16th and delivering opening remarks. Photo by Yoon Dong-joo doso7@

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] The ruling and opposition parties showed sharp differences over the Yoon Suk-yeol administration's 'Economic Policy Direction,' which focuses on corporate tax cuts and private sector-led growth. The opposition party criticized it as a 'tax cut for the rich' and 'MB government season 2,' while the People Power Party countered that it was an attempt to 'adjust social conflicts and divisions and block economic vitality.'

On the 17th, Kim Seong-hwan, chairman of the Democratic Party's Policy Committee, held a press conference at the National Assembly and criticized, "Looking at the economic policy direction, it is focused on policies for a small number of conglomerates and major shareholders, in other words, tax cuts for the rich."

Regarding the government's decision to lower the top corporate tax rate from 25% to 22%, he pointed out, "In 2018, the corporate tax rate on corporate income exceeding KRW 300 billion was raised from 22% to 25%, which was a normalization of the corporate tax cut that lowered the top corporate tax rate from 25% to 22% during the Lee Myung-bak administration." He added, "Looking at the effective corporate tax rate recently, the tax burden on large corporations is not actually high." He clarified his opposition to the corporate tax cut policy by stating, "It was 17.6% in 2017, increased to 19.1% in 2018, and then dropped again to 17.5% in 2019."

Kim also criticized the government's announcement to abolish the 'Investment Win-Win Cooperation Promotion Tax Special System,' saying, "While claiming to reform the corporate tax system to expand corporate investment and create jobs, the Yoon Suk-yeol administration's economic policy is self-contradictory in that it intends to abolish systems that promote investment and employment."

Regarding labor policy, he said, "They want to flexibilize working hours in the direction desired by conglomerates," and interpreted it as meaning, "The Yoon Suk-yeol administration will return to a long working hours system." Kim stated about the government's economic policy direction, "We will not hesitate to offer bipartisan cooperation for reasonable and rational policies for people's livelihoods and economic recovery," but added, "We will boldly oppose policies for specific conglomerates and a small number of wealthy individuals."

Meanwhile, the Democratic Party said there had been no cooperation requests from the People Power Party or the government regarding the economic policy direction. Kim said, "We have not officially received any cooperation requests," and added, "Although it was pre-distributed to the media, there was no prior explanation to the Democratic Party, which holds legislative power."

Park Hong-geun, floor leader of the Democratic Party of Korea, is attending the Emergency Measures Committee meeting held at the National Assembly on the 17th and delivering an opening remark. Photo by Yoon Dong-joo doso7@

In response, Kwon Seong-dong, floor leader of the People Power Party, said at a meeting on the same day, "The Democratic Party is quick to criticize it as a tax cut for large corporations and the rich," and questioned, "Do they intend to once again promote hostile policies against companies and divide the people, thereby fostering social conflicts and divisions and blocking economic vitality?"

He continued, "The previous administration's income-led growth, nationwide fiscal-led jobs, and short-term patchwork policy responses were thoroughly failures," and emphasized, "The worst economic indicators are objective evidence. If you want to criticize, self-reflection should come first as a matter of decency and duty. If the Democratic Party continues to oppose for the sake of opposition, it will be branded by the public as an anti-reform force and an economic hindrance."

Seong Il-jong, chairman of the Policy Committee, also explained, "The economic policy direction for the next five years of the Yoon Suk-yeol government is to minimize government intervention, enhance private sector-led economic vitality, create a virtuous cycle of growth and welfare, improve economic structure, and prepare for the future while stabilizing people's livelihoods." He said, "We will change the economic system to promote investment, including corporate tax cuts to restore private investment, create sustainable jobs, increase economic growth rates, and enable the public's real income to rise."

Kwon Seong-dong, floor leader of the People Power Party, is attending the party floor strategy meeting held at the National Assembly on the 17th and delivering opening remarks. Photo by Yoon Dong-joo doso7@

Kwon Seong-dong, floor leader of the People Power Party, is attending the party floor strategy meeting held at the National Assembly on the 14th and is talking with Sung Il-jong, chairman of the Policy Committee, during the meeting. Photo by Yoon Dong-joo doso7@

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