GNP Candidate Lee Promises to Close Tax Loopholes

Grand National Party (“GNP”) presidential candidate Lee Myeong-bak soon announces a new campaign promise, which is intended to cut off bribe channels and to increase the efficiency of state-run projects. According to his projection, his measures would save more than $10 billion a year.

A key player on the GNP task force in charge of campaign promises said yesterday on the condition of anonymity, “We have watched an astronomical amount of tax money being wasted in the course of execution of state-run projects. In addition, bribery distorts national operations. If we seal loopholes, we can cut at least 10% off the national budget. We are also working on anti-evasion measures.”

The task force reportedly recommended to candidate Lee that government workers should pay fines 50 times larger than any bribe taken. Currently, the Election Act of Korea imposes a fine 50 times larger than the amount taken illegally during a campaign.

The team pored over past state-run projects, such as the social overhead capital investment project. It noticed that loopholes in the system frequently led to waste of tax money. Thus, the team is working out measures to seal off the loopholes and increase efficiency. The team, for example, wishes to minimize discretionary spending. It plans to tighten up fund management procedures as well.

At the same time, Lee is considering various ways to dismantle vehicles used for tax evasion. He will reportedly come up with a mechanism to track the taxable sources of high-income professionals. In the meanwhile, his campaign cautions that a bold promise without clear boundaries might turn voters against Lee. It stresses the need for a prudent approach.

As mayor of Seoul, Lee successfully cut lots of corners. Lee believes his successful experience will significantly help him manage the national budget if he takes office. For this reason, this matter commanded his top priority, and in response, the party formed a special task force consisting of experts and former government officials to meet his wishes.

Lee reportedly plans to narrow his campaign promises to 100 and to announce them when the party’s official campaign committee launches.

Back in 2002, the party released 241 campaign promises. This time, however, it will stick with the most practical ones.

During the party primary, Lee promised to propel the national economy to 7 percent annual growth, to increase per capita income to $40,000, and to push up Korea’s national status to that of a G-7 member. To honor his vision, the party will explain, for example, how to construct a trans-Korean canal, to establish a body in charge of inter-Korean economic cooperation, to restore the middle class, and to root out corruption.

Lee has also incorporated Park Geun-hye’s promises, such as dramatic tax cuts and deregulation into his own. Park was his archrival during the party primary.

sunshade@donga.com