For President Moon Jae-in, South Korea’s first progressive state chief in almost a decade, challenging goals include reducing economic inequality and expanding state-led public welfare, without financially burdening the average taxpayer.
To achieve the goals, the president has been saying that his set of economic democratization plans do not require an extra tax increase, while leaving room for “further discussion” on the matter.
President Moon Jae-in (Yonhap)
“It is absolutely crucial to stabilize real estate prices so that people may be freed from skyrocketing housing expenses,” Moon said Thursday at a press conference marking his 100th day in office.
His remark came in answer to a question on whether he would introduce possession tax on real estate in order to curb speculation and market monopoly.
“The government has announced unprecedentedly strong real estate measures, which I believe are powerful enough to suppress prices,” he said.
“But should the real estate prices go up once again, despite (all these measures), the government has stronger alternatives ready.”
Although he seemed to hint at a possible tax hike for multiple home owners or affluent taxpayers, Moon added that a tax increase plan was currently not under consideration.
“(A possession tax on real estate) may be an option for the government to consider, should there be a social consensus on the idea, but in the current state, it is not part of the real estate stabilization plan,” Moon said.
On Aug. 2, the Moon administration presented a set of restrictions on real estate transactions, mostly tightening mortgage loan qualifications for house buyers and limiting speculative transactions.
Concerns were raised, however, that a possession tax is needed to induce owners of multiple properties to sell.
Moon also denied plans to increase the nation’s tax in general, claiming that the welfare plans set forth so far do not require extra taxation.
“The government has pledged to increase tax on corporates and the top economic cluster, which were all designed to back the incoming welfare programs,” he said.
However, he mentioned that a hike plan is not impossible, if the people agree on the idea.
The state chief’s stance, alluding to a possible tax readjustment in the future, was seen as a possible trigger of conflict with the largely conservative opposition at the National Assembly’s provisional session starting Friday.
The main opposition Liberty Korea Party, having recently decided to lower tobacco prices and cut oil tax, is set to stand against any scenario of a tax hike that is aimed at financing Moon’s welfare plans.
By Bae Hyun-jung (firstname.lastname@example.org