Phil Gramm: Small Government Is Best

Phil Gramm, Vice Chairman of UBS Investment Bank, said, “The best environment for businesses to work in is made when the government does the least,” and emphasized the need for a ‘small government’.

Gramm, a former senator for the Republican Party, met with Korean correspondents in Manhattan, and revealed, “Most countries like the U.S. or Korea tend to collect too much taxes from citizens, and use too much of that money.”

Upon hearing Korea’s income tax is 36% at its highest, he said, “It’s too high. It’s my thought that individual income tax is appropriate at 15%.” He also added, “Government expenses, regulations, and taxes are best when they are at their least.”

Gramm advised, “Korean people are a very diligent and excellent people, but the system doesn’t seem to be able to follow up to the people. To recover Korea’s growth rates, the maintenance of the system such as laws and taxations must be hurried.”

Concerning the Northeast Asia financial center Korea is promoting, he said, “To make a financial center, gathering competent people is important. To do this, a bold plan is need to draw talented people.”

Mentioning the Korean police investigations into Lone Star Funds, he made the assumption, “We do not know precisely what faults Lone Star made,” and continued, “But we must not forget how much Korea looked to foreign investment during the economic crisis in 1997.

“It is not good to view the investment profits of foreign capitol with an opposing sentiment. Being uncomfortable with earning a lot of money is not good.”

Gramm, who was a professor of economics at Texas A&M University, was a Republican candidate for the presidential election in 1996. His wife is a third generation Korean American who served as the head of the Commodity Futures Trading Commission.

kong@donga.com