[2022 National Audit] Choo Kyung-ho: "I Do Not Agree with the 'Big Corporation = Rich' Frame... Corporate Tax Cuts Have Economic Growth Effects"

"Income Tax Reform Plan Also Provides More Benefits to the Middle and Working Classes"

Deputy Prime Minister for Economy Choo Kyung-ho is attending the audit of the Ministry of Economy and Finance held at the National Assembly on the 5th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Asia Economy Sejong=Reporter Kwon Haeyoung] Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated on the 5th that "corporate tax cuts are effective for investment, job expansion, and growth."

At the National Assembly's Planning and Finance Committee audit of the Ministry of Economy and Finance on the same day, Deputy Prime Minister Choo said, "The reason OECD countries have continuously lowered corporate taxes is because it helps expand investment and revitalize the economy."

He explained, "When our country raised the corporate tax rate to 25% (highest rate), our international tax competitiveness dropped by 10 ranks," adding, "International organizations such as the OECD have also positively evaluated the government's recent tax cut plan." He added that if corporate tax cuts lead to increased investment, improved productivity, and more jobs, a virtuous cycle of increased tax revenue can ultimately be expected.

Regarding criticism that corporate tax cuts are "tax cuts for the rich," Deputy Prime Minister Choo rebutted, "I do not agree with the frame that views large corporations as the rich."

He argued, "In the case of the country's largest company (Samsung Electronics), there are 6 million shareholders, so it is not a company owned by a single individual," and "corporate profits are distributed broadly to shareholders, consumer product price reductions, and wage increases for workers." He emphasized, "If the economy is struggling and we do not take a progressive approach in these areas and leave things as they are, how can we revive the economy?"

Regarding the UK's withdrawal of its tax cut policy, he drew a clear distinction, saying it was a matter of "fiscal soundness" and different from the corporate and income tax cuts pursued by our government.

Deputy Prime Minister Choo explained, "The core issue in the UK is not tax cuts but fiscal soundness," adding, "The UK's national debt ratio now exceeds 100%, and there were international warnings that increasing fiscal spending would severely deteriorate fiscal soundness." He continued, "The UK withdrew the plan to lower the top income tax rate from 45% to 40%, but maintained the decision not to raise corporate tax. If the UK had referred to the tax cut plan Korea announced in August, this situation would not have occurred."

Deputy Prime Minister Choo also clarified that the previously announced income tax reform plan provides more benefits to low-income groups than to high-income groups.

He emphasized, "The income tax reform plan adjusted the tax brackets to reduce the burden on the lower income brackets," adding, "The tax burden for a person earning 30 million won is reduced by 27%, while for high-income earners it is only 1-5%, so the middle and lower-income groups receive a larger income tax reduction."

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