Civic Group: "Yoon Administration's Tax Reform Plan, a Rehash of Failed Old Policies"

"Tax Reform Highly Unfair to Socially Vulnerable Groups"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] As the Yoon Seok-yeol administration announced the 2022 tax reform plan, civic groups pointed out that focusing on tax cuts for the wealthy while mentioning fiscal soundness is a 'reheating' of failed old policies.

On the morning of the 27th, civic groups such as the Citizens' Coalition for Economic Justice (CCEJ) and People's Solidarity for Participatory Democracy held a "Discussion on the Evaluation and Suggestions of the Yoon Seok-yeol Government's Tax Reform Plan" at the CCEJ auditorium in Jongno-gu, Seoul.

The civic groups criticized that an active fiscal policy is needed, but the Yoon administration is focusing on tax cuts for the wealthy. Professor Yoo Ho-rim of Gangnam University’s Department of Economics and Taxation said, "Countries around the world are implementing active fiscal policies in addition to monetary policies to withdraw liquidity, and to secure necessary funds, they are introducing so-called 'super rich taxes' or considering raising corporate tax rates. However, in Korea, the corporate tax rate applied to mega-corporations was lowered from 25% to 22%, and the limits and scope of inheritance tax deductions for medium-sized enterprises were expanded to 100 billion KRW and 1 trillion KRW in sales, respectively."

He added, "This tax reform plan is a reheating of old policies that ended in failure during the Lee Myung-bak administration over 10 years ago. Considering that tax policies related to the youth and socially vulnerable groups, who are expected to suffer the most from inflation and economic recession, have been maintained as is or somewhat reduced, this is a very unreasonable tax reform."

Civic groups pointed out that taxes should be increased on high-income groups and active support should be provided to those whose situations have worsened due to inflation and economic recession. Professor Yoo said, "The government should not focus solely on deregulation and trickle-down effects but should prepare desirable tax increase measures targeting groups with sufficient tax-paying capacity and ensure stable fiscal capability. For small business owners and low-income groups struggling due to inflation and economic recession, tax policies and fiscal policies that can alleviate tax burdens and compensate income should be actively pursued."

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