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Lee says he would collect corporate carbon tax to give citizens basic income  

Lee says he would collect corporate carbon tax to give citizens basic income  

Posted November. 26, 2021 07:37,   

Updated November. 26, 2021 07:37


Presidential candidate Lee Jae-myung of the Minjoo Party of Korea has revealed his determination to introduce the carbon tax system, describing it as the only way to a low carbon society. He proposed to levy a carbon tax on businesses to finance basic income.  

Lee talked of carbon tax in an interview with the Dong-A Ilbo on Thursday, explaining that he aims to help reduce carbon emissions by guiding businesses to lead industrial shift and adapt to a new system. “In the meanwhile, I plan to give out benefits evenly to all South Korean citizens in an effort to relegate repulsive response and social cost,” he said, adding that carbon tax will be primarily paid by businesses.

With a new carbon tax scheme put in place, he intends to make sure that a carbon tax revenue of 50,000 to 80,000 won per ton adds up to a budget of 30 trillion to 64 trillion won that can base his idea of introducing basic income. However, it is expected that businesses will show a strong backlash against a carbon tax burden that is similar to 65.5 trillion won in corporate tax payment over the next one year. The South Korean administration plans to get research commissioned about whether to put carbon tax in practice, collection methods, etc. within this year.

Minjoo’s presidential candidate Lee added that carbon tax can be swiftly agreed upon by social consensus. Pledging to introduce basic income-type land tax as part of his real estate policies earlier, he explained that carbon tax may realistically come before land tax. He said that too high focus on demand restraint approaches caused market distortion, adding that a lessened regulation system of floor area ratio may help normalize housing supply policy-wise.

As for basic income based on carbon tax revenue, Lee aims to provide consumption coupons in the form of a regional currency. “Low growth rates have resulted from reduced demand to hinder a supply cycle. “To make things right, I’d like to boost consumption. If cash is given out to citizens, they will put it in their bank accounts. That is why I propose to distribute consumption coupons.”

Sang-Jun Han alwaysj@donga.com