The Moon administration is actively accommodating demands by Lee Jae-myung, the presidential candidate of the ruling Democratic Party of Korea, while pushing policies to curry favor with voters.
On the surface, the administration says it is drawing up policies to meet the needs of the people, but actually, it is supporting the candidate by reflecting his opinions and pledges in its policies in meetings with the party.
It is questionable if the government is violating its legal obligation to stay politically neutral from elections.
The party and the government seek to freeze state-assessed real estate values, which are used to calculate property taxes, for a year.
They agreed to consider the freeze positively in their meeting held just two days after Lee called for tax system revamp on Saturday, saying that tax burden has got too heavy due to soaring home prices.
Because assessed values to be unveiled in March for 2022 taxation are certain to be much higher than those for this year, the party seems to be pushing the freeze to block a negative election effect from an impending tax bomb.
The party and government are reportedly reviewing ordinance decrees on comprehensive property taxes imposed heavily on owners of multiple homes, after Lee remarked the related tax system needs to be adjusted. They cited an example in which a person was charged with a heavy comprehensive property tax this year as a multiple-home owner because he bought a mud hut in the countryside and the primitive structure was counted as his second home.
They are also considering suspending the payment of next year’s comprehensive property tax for homes owned by seniors with no second homes.
Earlier, Lee had called for a one-year suspension of heavy taxation on capital gains taken by owners of multiple homes from sales of their houses.
Until recently, he vowed to create a new tax on everyone who owns land, and two years ago he argued that assessed values should be raised to increase property taxes. Then suddenly he shifted stances, calling for a freeze on holding taxes and suspension of capital gains taxation. The Moon government and his party have stigmatized owners of multiple homes as the main culprit behind the skyrocketing home prices.
Their sudden change seems to be a tactical retreat to get votes by soothing over people infuriated at the property price surge and resultant tax bomb.
Until about a week ago, 947,000 homeowners, including 130,000 without second homes, paid 5.7 trillion won ($4.7 billion) in comprehensive property tax for this year.
It seems that the party and the government are pretending to be helpful to taxpayers after dropping tax bombs.
If they perceive the tax bomb as a real problem, all they have to do is reduce taxes themselves by lowering tax rates or assessed values -- not freeze or suspend the rates. Assessed values, if frozen next year, will jump sharply the year after next, as they would have to reflect two years’ worth of increases. Taxpayers may feel a much stronger shock as a result, but there is no mention about that.
The Moon administration is focusing its policies on the presidential election on March 9 next year. It will freeze electric and gas bills for the first three months of next year. It will create half of tax-paid jobs for next year intensively in January, and pour 63 percent of fiscal outlays in the first half, though it says it is concerned about inflation.
An array of polices supportive of Lee runs counter to Moon’s profession to stay politically neutral in elections. Moon said in a meeting with staff on July 5 that Cheong Wa Dae and the government must maintain political neutrality now that election season has begun. In October, he decided not to hold three-way meetings among senior officials of Cheong Wa Dae, the government and the party until the presidential election. He said that the high-level meeting may be misconstrued as a channel to support the ruling party’s presidential candidate.
But as the election approaches, the government has rolled up its sleeves to assist the ruling party’s candidate. Policies for the people have taken a backseat to vote-getting politics.
By Korea Herald (email@example.com