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Debates on whether to raise incomes taxes on the wealthy will likely be heated between ruling and opposition lawmakers during the September plenary session of the National Assembly.
While the governing Saenuri Party had taken a skeptical stance over demands to increase the tax burden on the high-income bracket, opposition lawmakers have revived the issue.
Along with the opening of the plenary session, 10 lawmakers of the main opposition Democratic Party proposed a motion to raise the upper ceiling on tax rates and widen the scope of the top tax bracket.
The motion features a proposition to elevate the maximum tax rate to 45 percent (when a variety of deductions are not calculated) for an individual whose annual income exceeds 500 million won ($435,000).
Currently, the upper ceiling is 38 percent for those who earn more than 300 million won per annum.
As a proposed revision, the DP lawmakers proposed that the 38 percent rate be applicable to individuals whose income ranges between 150 million won and 500 million won, as the second-top bracket.
The current tax rate on those whose income ranges between 150 million won and 300 million won has been set at 35 percent.
The bill proposers cited cases in 10 out of the 34 member countries of the Organization for Economic Cooperation and Development.
Rep. Min Byung-doo of the DP said that OECD members such as the U.S., France, Israel and Australia have maximum tax rates of 45 percent or more.
“The ceiling hikes have been a trend worldwide since the 2008 global financial crisis.”
The government, shifting from policies targeting ordinary salaried workers for its higher tax revenue, should levy the so-called solidarity taxes, which is designed to share financial difficulties of the underprivileged, on the utmost high-income bracket, he said.
The Finance Ministry, however, stresses that high-income earners have already faced a higher tax burden as income deductions when calculating taxes are scheduled to be converted to tax deductions.
A ministry official said it is necessary to take a wait-and-see stance for the a certain period, reiterating that the present 38 percent ceiling was introduced only one year before.
Some private tax advisers issued the possibility that excessive taxes could be linked to other types of tax evasion.
Meanwhile, the proposed revision to the 2013 tax code, unveiled by the Finance Ministry in early August, sparked backlash from a variety of sectors, as the change would increase the tax burden of salaried, middle-income workers from next year.
By Kim Yon-se (kys@heraldcorp.com)
While the governing Saenuri Party had taken a skeptical stance over demands to increase the tax burden on the high-income bracket, opposition lawmakers have revived the issue.
Along with the opening of the plenary session, 10 lawmakers of the main opposition Democratic Party proposed a motion to raise the upper ceiling on tax rates and widen the scope of the top tax bracket.
The motion features a proposition to elevate the maximum tax rate to 45 percent (when a variety of deductions are not calculated) for an individual whose annual income exceeds 500 million won ($435,000).
Currently, the upper ceiling is 38 percent for those who earn more than 300 million won per annum.
As a proposed revision, the DP lawmakers proposed that the 38 percent rate be applicable to individuals whose income ranges between 150 million won and 500 million won, as the second-top bracket.
The current tax rate on those whose income ranges between 150 million won and 300 million won has been set at 35 percent.
The bill proposers cited cases in 10 out of the 34 member countries of the Organization for Economic Cooperation and Development.
Rep. Min Byung-doo of the DP said that OECD members such as the U.S., France, Israel and Australia have maximum tax rates of 45 percent or more.
“The ceiling hikes have been a trend worldwide since the 2008 global financial crisis.”
The government, shifting from policies targeting ordinary salaried workers for its higher tax revenue, should levy the so-called solidarity taxes, which is designed to share financial difficulties of the underprivileged, on the utmost high-income bracket, he said.
The Finance Ministry, however, stresses that high-income earners have already faced a higher tax burden as income deductions when calculating taxes are scheduled to be converted to tax deductions.
A ministry official said it is necessary to take a wait-and-see stance for the a certain period, reiterating that the present 38 percent ceiling was introduced only one year before.
Some private tax advisers issued the possibility that excessive taxes could be linked to other types of tax evasion.
Meanwhile, the proposed revision to the 2013 tax code, unveiled by the Finance Ministry in early August, sparked backlash from a variety of sectors, as the change would increase the tax burden of salaried, middle-income workers from next year.
By Kim Yon-se (kys@heraldcorp.com)
