by Lee Dongwoo
Published 01 Aug.2024 10:58(KST)
Lee Jae-myung, the Democratic Party of Korea's presidential candidate, and Cho Guk, the leader of the Cho Guk Innovation Party, are increasingly clashing over the comprehensive real estate holding tax. When Lee hinted at easing the tax for single households with one residence where they actually live, Cho opposed it again, arguing that easing the tax would ultimately accelerate regional extinction. Some in the political sphere speculate that the disagreement over the tax could widen cracks in the policy alliance between the two parties.
Cho's concern about Lee's policy to ease the tax stems from the fact that the comprehensive real estate holding tax accounts for a significant portion of local government grants. If the local government grants, which support the administrative operations of local governments, decrease, it could deal a fatal blow to regional finances. Cho criticized the tax easing policy, saying, "Living in a house worth over 2 billion won but not wanting to pay even 800,000 won a year."
On the other hand, Lee argues that even if the tax on the primary residence is eased, increasing taxes on land, forest land, and buildings can sufficiently balance the revenue. According to Lee, the tax collected from single homeowners who actually reside in their homes amounts to about 90 billion won. The impact on tax revenue is not as significant as expected. Lee said, "Is it really necessary to take such a risk by resisting for single households with one residence?"
Opinions are divided within the Democratic Party as well. Some believe that a compromise can be reached aimed at expanding the moderate voter base, while others criticize that the rightward shift to ease the tax ultimately weakens the Democratic Party's identity.
The disagreement over the comprehensive real estate holding tax has also led to speculation that the alliance between the two parties may weaken after the Democratic Party's leadership is inaugurated. A notable example is the relaxation of the negotiation group formation criteria for the Cho Guk Innovation Party. Cho expressed disappointment at Lee's lukewarm attitude while pushing for a bill to ease the criteria to '10 seats.' Right after the opening of the 22nd National Assembly, Cho hinted at an alliance on the bill with Lee, but Lee has avoided giving a definite answer.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.