With "Democratic Party's Forceful Implementation of Financial Investment Tax, Comprehensive Real Estate Tax Season 2"

"Passing the Tax Bomb to Small Investors"
"Impact Not Just on Top 1%, but Entire Stock Market"
Urging the Democratic Party to Cooperate in Postponing Introduction Until January Next Year

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Hyun-ji] Seong Il-jong, Policy Committee Chairman of the People Power Party, criticized the Democratic Party of Korea's push to introduce the ‘Financial Investment Income Tax starting January next year,’ calling it “nothing more than Comprehensive Real Estate Tax Enforcement Season 2” on the 18th.

At the party's floor strategy meeting held at the National Assembly that day, Chairman Seong said, “The Democratic Party intends to impose a tax bomb on small investors, whose dream is to buy a single house by splitting their salary and using overdraft accounts, by unfairly labeling them as rich.”

The Financial Investment Income Tax is a system that imposes a 20% tax (25% for amounts over 300 million KRW) on investors whose income from financial investments such as stocks, bonds, and funds exceeds a certain amount (50 million KRW for stocks, 2.5 million KRW for others). It was decided through bipartisan agreement in December 2020 during the Moon Jae-in administration and is set to be implemented in January next year. The Democratic Party maintains that the tax targets the top 1% and thus does not affect most investors.

Chairman Seong countered, “The top 1% claimed by the Democratic Party is based on manipulated statistics using data that cannot even serve as a foundation, which the Democratic Party itself has admitted,” adding, “The Financial Investment Income Tax is not an issue of the top 1%, but a problem for the entire stock market and for South Korea suffering amid the global economic crisis.” He further criticized, “The Democratic Party opposes the government’s proposal to postpone the implementation of the Financial Investment Income Tax for two years and is engaging in ‘legislative bullying’ that disregards national interests and the people.”

He explained, “With the top 0.5% of individual investors holding about 50% of the total individual holdings, if investors withdraw and the securities market shrinks, who will take responsibility for the damage to small investors?” He added, “Taiwan and Japan also introduced capital gains taxes on stocks, but market shocks such as stock price crashes and sharp declines in trading volume occurred, and Taiwan eventually withdrew the introduction altogether.”

Regarding the recent mixed situation within the Democratic Party between calls for postponement and cautious opinions, he pointed out, “There was even a situation where the party leader (Lee Jae-myung)’s remark about considering postponement of the Financial Investment Income Tax was denied by the standing committee secretary,” adding, “I wonder if the leadership of Lee, shaken by allegations of corruption, is losing its strength.”

Chairman Seong urged cooperation for postponement, saying, “Where is the line between the ruling and opposition parties when it comes to policies for the middle class?” and “Please clarify the Democratic Party’s official position.”

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