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Lee Nak-yon’s profit sharing scheme would stamp down businesses  

Lee Nak-yon’s profit sharing scheme would stamp down businesses  

Posted January. 13, 2021 07:32,   

Updated January. 13, 2021 07:32


The profit-sharing scheme proposed by Democratic Party of Korea (DPK) chief Lee Nak-yon on Monday is creating a stir in economic and political circles. “We need to discuss various ways for profit-making companies to help those plagued by COVID-19,” he said. The Democratic Party has even mentioned concrete implementation methods such as supporting small business owners with “voluntary” donations and providing tax benefits to the donors. The word “voluntary” was used, but large conglomerates such as Samsung, SK and LG as well as “untact businesses” such as Naver and Kakao have already been mentioned by the party.  

It is worrisome that the damage on vulnerable social groups and businesses grows bigger due to the prolonged pandemic while more people enjoy increased wealth thanks to the sharp rise in the housing and stock prices. The fact that no opposition has been suggested to the selective provision of the third disaster relief fund to small business owners means that the citizens agree to support those who were hit harder by the coronavirus. But a normal nation would not collect profits from large businesses and wealthy individuals to help the poor. Argentina, which decided to collect one-off COVID-19 tax from some 12,000 upper class citizens, is in financial difficulty due to its deep-seated populism policy.  

Profits of businesses should be invested for the future and shared between workers and investors. That is why the scheme is criticized as a socialist idea ignoring market principle that businesses make money and contribute to the country by paying taxes and support the economy by providing wages to their employees. The ruling party that wants to provide the fourth disaster relief fund to all citizens including public officials who were not affected by the virus at all by increasing the national debt. Helping those in need through donations from large companies does not make sense. President Moon Jae-in encouraged donations when the government provided the first disaster relief fund last year, but only 1.9 percent of the fund has been donated.

No matter how the word “spontaneous” means, no company would understand donations led by the ruling party as those with pure intentions. How can donations be made voluntarily while worrying about social criticism that will be poured out on them if they don't participate or donate little, which could eventually cause damage to the corporate image, and disadvantages that can be followed in the future? The ruling party, which enforced bills to shun business activities as the majority party, should not try to collect legitimate corporate profits like semi-tax. I am not entitled to such a discussion.