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[Editorial] People Are Not a Tax Vending Machines

Posted September. 24, 2005 07:12,   


Sung Kyung-ryung, head of the Presidential Committee of Balanced National Development, said in a lecture yesterday, “A balanced national development policy is Korea’s Blue Ocean strategy that the country has never adopted.” “Blue Ocean” means a new market that brings high profits and rapid growth.

The 115 trillion-won balanced development project has already been mired in controversy. The relocation of 176 public corporations to provincial areas which ended up as a pork barrel is highly likely to squander taxes, rather than yield a new profit and rapid growth. Even an internal evaluation report by the Ministry of Commerce, Industry and Energy and the presidential committee said, “Balanced regional development project overlap in many cases, and connection among projects is weak.”

The size of massive national projects pushed forward by the participatory government exceeds 700 trillion won. Many of them are far apart from the global trend which pursues growth and efficiency. The financial burden out of the entire cost of the projects will reach 464 trillion won. The people’s burden amounts to more than 40 million won per household.

Byun Yang-kyun, minister of Planning and Budget, countered, “It is unreasonable to talk about 700 trillion won, since many projects are yet to be confirmed.” If that is the case, then, Minister Byun needs to list the projects that will not be covered by the 700 trillion won. The Planning and Budget Ministry reportedly already notified the Ministry of National Defense that “Costs of military reform can be covered by finance.” If it is decision of the ministry, it should explain to the public in detail as to how it will cover the costs, as the ministry in charge of the matter.

It is clear that the government should considerably lower its expenditures, including welfare expenditures, in order to push ahead with massive national projects without imposing extra tax burdens on the public. However, the government’s mid-term (2005 to 2009) financial management plan says that social welfare expenditures alone will amount to 298 trillion won, increasing by an annual average rate of 9.2 percent.

The people’s capacity to bear the tax burden has already reached its limit. It is expected that every Korean will have to pay four million won in taxes and social security funds, a rise from 3.16 million won in 2001. Many people will have to sell their properties to bear the burden if the government squeezes taxpayers to the extent of extortion. This is no time for the government to talk about the “Blue Ocean.”