Speaking during a parliamentary audit of his ministry last month, Finance Minister Hyun Oh-seok said that it would be desirable to impose all corporate taxes at a uniform rate. Though he added the introduction of the measure would be considered on a long-term basis, his remarks prompted strong backlash from political circles.

Lawmakers of the main opposition Democratic Party argued a flat tax system would only benefit large corporations and increase burdens on smaller enterprises. The conservative ruling Saenuri Party, which has clashed with the liberal opposition over almost all major policy issues, also struck a negative tone, saying the idea was “realistically impossible and politically dangerous.”

Despite the finance minister’s subsequent moves to water down his stance, the debate over the relevance of applying a single corporate tax rate has been continuing among financial experts and party officials. It is certainly necessary to take time to make a thorough review of all pros and cons of the idea before reaching a final conclusion. Still, it seems too simplistic an argument to say that the imposition of a uniform corporate tax rate would lead to only serving the interests of the wealthy.

A corporation can be seen as an entity encompassing capitalists, engineers and other employees. To be exact, corporate taxes are burdened by all these members and other market participants connected with corporate activities. Few would agree that middle-income earners are rich because they work for or possess some shares of a big corporation with large profits.

Certainly, a small number of conglomerate heads and executives are paid heavily ― or excessively in the eyes of many ordinary workers. But it can be illogical to identify them with a corporation itself and subject it to a higher rate of tax than smaller companies. It may be more reasonable to get the few affluent executives and major stockholders of large businesses to pay more through the individual income tax scheme.

Under the country’s current tax codes, companies that annually earn less than 200 million won ($180,000) are subject to a 10 percent rate, while the burden rises to 20 percent and 22 percent for corporations with annual profits of 200 million to 20 billion won and more than 20 billion won, respectively.

Korea is one of four members in the 34-nation Organization for Economic Cooperation and Development that have adopted a graduated corporate tax rate system with three or more tax base segments. Eight member states implement a simpler two-tier system and 23 others have a uniform tax rate.

Simplicity and fairness can be considered as significant advantages of the flat tax, which are easier for taxpayers to understand and report. Simplifying the corporate tax system would be more in keeping with the global trend, helping attract more foreign investors.

What needs to precede the introduction of a single corporate tax is reducing or abolishing a complex set of tax breaks for companies, which would bring about the effect of offsetting possible decreases in tax revenues and correcting tax distortions.

It should also be noted that raising corporate tax rates would weaken local companies’ international competitiveness and push them to move production abroad. These consequences might do nothing to help ease the deepening economic and social polarization, which politicians have been competitively vowing to ease. They should pay attention to why almost all major economies have cut corporate tax rates while seeking to increase revenues through all other means to reduce fiscal deficits that have ballooned in the course of coping with the 2008 global financial crisis.