Democratic Party Out of Sync on Abolishing Financial Investment Tax... Jin Seong-jun Faces 'Comment Bomb'

Lee Jae-myung "Tax exemption up to 500 million won over 5 years needed"
Jin Sung-jun "I oppose abolition... discussion necessary"
Flood of critical comments on government tax law amendment statement

Opinions within the Democratic Party of Korea are divided over the Financial Investment Income Tax (금투세) set to be implemented from next year. Acting leader Park Chan-dae and party leader candidate Lee Jae-myung have mentioned 'postponement' and 'adjustment of limits,' while Jin Seong-jun, the chairman of the Policy Planning Committee, maintains a stance to 'proceed as planned.' Jin's blog has been flooded with comments from investors urging the abolition of the Financial Investment Income Tax. Last month, he posted a statement from the National Assembly's Strategy and Finance Committee opposing the government's tax law amendment proposal.

On the afternoon of the 6th, Jin's post on the National Assembly's Strategy and Finance Committee statement received over 5,780 comments. Most of these comments criticize Jin for pushing the introduction of the Financial Investment Income Tax. Financial investors have opposed the tax, stating that "the Korean capital market will become even more difficult" ahead of its introduction. The Financial Investment Income Tax is scheduled to be implemented from January 1, 2025, but last month the government submitted a tax law amendment bill to abolish it.

Jinseongjun, Member of the Democratic Party of Korea. / Photo by Dongju Yoon doso7@

The government and ruling party are strongly pressuring for the abolition of the Financial Investment Income Tax following the recent stock market crash. On the same day, Han Dong-hoon, leader of the People Power Party, and Choo Kyung-ho, floor leader, both urged the opposition to cooperate in abolishing the tax. During a party-government meeting related to the Wemakeprice and TMON incidents, Leader Han said, "This time, I believe we must discuss the abolition of the Financial Investment Income Tax on a bipartisan basis," adding, "The stock market is heavily influenced by psychological factors. Major events like the abolition of the Financial Investment Income Tax usually start to be reflected about six months in advance."

In response, Jin told Asia Economy in a phone interview, "It is grammatically incorrect to say we should discuss this on a bipartisan basis while insisting on enforcing the People Power Party's position," and rebutted, "Is the recent stock market crash really because of the Financial Investment Income Tax?" He continued, "Are there any financially advanced countries that do not have the Financial Investment Income Tax? It is not that major investors have invested in Korea because there was no such tax before." In fact, countries like the United States, the United Kingdom, and France tax stock income above certain thresholds.

He stated, "Once the Democratic Party's leadership is elected, there will need to be a process to confirm opinions within the party," adding, "My position will be one part of N, and Leader Lee's position will also be one part of N." He further said, "By debating these, if the party's consensus is unified, that will soon become the party's official stance." Leading party candidate Lee Jae-myung suggested postponing the implementation or raising the threshold of the tax, mentioning during a TV debate on the 25th of last month that "tax exemption should be granted for earning about 500 million won over five years through financial investment."

Meanwhile, Im Kwang-hyun, deputy floor leader, planned to hold a forum on the 'Improvement Measures for the Financial Investment Income Tax' at the National Assembly on the following day (the 7th) but canceled it. Analysts suggest this was due to the public's heightened sensitivity to the Financial Investment Income Tax issue following the stock market crash.

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