Democratic Party Accepts Mediation Proposal to Cut Corporate Tax by 1%p... 'Government and Ruling Party Must Now Respond' (Comprehensive)

Lee Jae-myung "Decided Considering Difficult Livelihood Conditions"
Accepts 1%p Reduction in Corporate Tax Top Rate
Tax Cut Plan for Low-Income Still Valid
Democratic Party "If Ruling Party Rejects Mediation, Will Pass Solo Bill"

[Image source=Yonhap News]

[Asia Economy reporters Naju-seok and Park Joon-yi] The Democratic Party of Korea announced on the 15th that it will accept the mediation proposal by National Assembly Speaker Kim Jin-pyo, which includes lowering the top corporate tax rate and executing the budget for agencies established by enforcement decrees through contingency funds. This marks a step back from their previous stance opposing the reduction of the top corporate tax rate, which they had labeled as a 'super-rich tax cut.' The party leadership's acceptance of the mediation proposal was officially ratified through a party caucus.

Lee Jae-myung, leader of the Democratic Party, explained at a press conference at the National Assembly that "After much deliberation, the Democratic Party decided to respect the Speaker's intention and accept the mediation proposal from a magnanimous perspective," adding, "Although the Speaker's mediation proposal does not fully align with the Democratic Party's position, we are making this statement considering the difficult livelihood situation."

Earlier, Speaker Kim Jin-pyo presented the mediation proposal during a meeting with ruling and opposition floor leaders in the morning, addressing the sharply divided positions on the corporate tax and budget issues for agencies established by enforcement decrees. The proposal includes lowering the top corporate tax rate by 1 percentage point and executing the budgets for the Ministry of the Interior and Safety's Police Bureau and the Ministry of Justice's Personnel Information Management Unit?both established by enforcement decrees?through contingency funds until a separate budget is agreed upon by both parties or decided by an authorized institution.

Lee said, "The livelihood economy is truly difficult," and added, "We must unite our society's full strength to overcome this crisis. We cannot continue to neglect the irresponsible situation of leaving the budget bill unprocessed."

Regarding the shift from their original opposition to lowering the top corporate tax rate, Lee explained, "Although tax cuts for ultra-high earners and the super-rich do not help due to the economic situation and worsen government finances, and thus do not aid livelihoods, the lack of progress between the government, ruling party, and the Democratic Party is undesirable," adding, "Even if political judgments differ, from a magnanimous perspective, we had no choice but to exercise pragmatic realism." He further likened the situation to "When a child's arm is pulled from both sides by the real mother and a fake mother, the real mother has no choice but to let go."

The Democratic Party also explained that, along with lowering the top corporate tax rate, the tax cut for companies with operating profits between 200 million and 500 million won?referred to as the 'people's tax cut'?remains valid. Park Hong-geun, the Democratic Party floor leader, stated, "The Speaker's mediation proposal is a so-called comprehensive settlement, and the 3 trillion won people's tax cut remains valid."

Since the party agreed on the budget bill, they demanded the commencement of a state audit on the Itaewon tragedy. Lee said, "Tomorrow marks the 49th memorial of the Itaewon tragedy. We can no longer ignore the bereaved families' desperate calls for an unreserved investigation," adding, "The National Assembly must immediately start the state audit to uncover the truth, punish those responsible, and establish measures to prevent recurrence."

Following the leadership's conclusion, the party caucus also ultimately accepted the Speaker's mediation proposal. However, it was clearly stated that if the government and ruling party do not accept the mediation proposal, there remains the possibility of passing the Democratic Party's own revised bill.

Lee Su-jin, the Democratic Party floor spokesperson, said during the party caucus briefing, "Some members expressed negative opinions about the Speaker's mediation proposal," and "There is also public opinion that our own revised bill should be passed." However, she added, "If the plenary session is held even tomorrow, after related discussions, we concluded to accept the mediation proposal to do our best for the people."

Regarding the uncertain acceptance of the mediation proposal by the government and ruling party, she said, "I think after the ruling party finishes the national agenda review meeting and returns to the National Assembly, negotiations related to the budget will be completed tomorrow." When asked about the possibility of the government and ruling party not accepting the proposal, she said, "We will have to try to pass the revised bill prepared by the Democratic Party."

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