A need for a social consensus on welfare and taxes

The brouhaha triggered by the government’s proposal on a revised tax law is being wrapped up weirdly. In response to politicians’ attack on the “tax bombs on the middle class” and President Park Geun-hye’s reprimand, Deputy Prime Minister Hyun Oh-seok made an apology and the government tries to raise the standard income that will be subject to an increased tax burden. The fuss started from the president’s impossible pledge of “welfare without tax increase” and her insistence on the implementation of the pledge. Those who made the pledge are in a position to blame someone while the government’s economic team is forced to become a scapegoat. What an archaic politics!

Korea is the bottom of the Organization for Economic Cooperation and Development except for Mexico with the welfare expenditure to the budget ratio of 9.4 percent. The budget for welfare must be increased. Since welfare is directly involved with tax, people should not avoid a tax increase while aiming for a welfare nation. This column has criticized political parties’ populist pledges in every election. Hurriedly scrapping a tax increase plan due to voters, despite its need, is also populism like frivolous pledges. If the public opinion is distorted and policies are shaken, the country will have no bright future.

When President Park announced her running for presidency in July last year, she said, “I’ll elicit a grand public compromise on welfare means and tax burdens. I’ll lay the foundation for the people’s happiness that can last for more than a half century going forward.” It was a healthy idea. But as the election campaign proceeded, a tax burden issue was mentioned less and less and boiled down to a slogan of “welfare without a tax increase.”

The Park administration stressed this time that it is not a tax increase because it neither created a new tax account nor increased a tax rate,” while reducing non-taxable reduction for welfare money. The economic team did its best not to tarnish the president’s pledge of “keep the pledge without a tax increase.” It is not right for the president to pass her responsibility on to the deputy prime minister and avoid discussions on taxation and welfare in order to elude political risk. The president needs to take this opportunity to restructure her pledges and admit that taxes equal welfare, and then draw a public consensus on the level of welfare and tax burden.

Opposition parties should return to the National Assembly instead of taking political interests from this event. They should seriously discuss taxes and welfare and come up with alternative options. Voters are also responsible for politicians who are tempted to opt for populism. Most of all, people must realize that there is free welfare.