The ruling Democratic Party is considering increasing the tax rate for more high-income earners, its chief said Wednesday, amid its rival's escalating offensive against the move.
Choo Mi-ae told reporters that her party will explore the possibility of raising the income tax rate for individuals earning between 300 million won ($267,737) and 500 million annually to 40 percent from the current 38 percent.
"But what matters is social consensus and acceptance... We must not discuss any increase for other income brackets now," Choo said, apparently taking caution not to inflame those against a potential tax rise.
Choo Mi-ae, the leader of the ruling Democratic Party, speaks during a party meeting at the National Assembly in Seoul on July 26, 2017. (Yonhap)
Her remarks came less than a week after she proposed raising tax rates for the super-rich and top-earning conglomerates apparently to help the government secure the wherewithal to bankroll its welfare and job creation agenda estimated to cost 178 trillion won over the next five years.
During a government finance strategy meeting last Thursday, Choo floated the idea of raising the corporate tax rate for firms with annual net profits exceeding 200 billion won to 25 percent from the current 22 percent, and the rate for individuals earning more than 500 million won to 42 percent from the current 40 percent.
The ruling party and government are set to hold a bilateral meeting Thursday to discuss how to retool the taxation regime so as to achieve what they have called a "normalization" of the tax system.
The main opposition Liberty Korea Party upped its offensive against the possible tax increase, while seeking cuts in oil tax and tabacco prices.
"The cuts are what our presidential candidate pledged as part of efforts to lessen the financial burden for average citizens,"
Lee Hyun-jae, the party's policy chief, told Yonhap News Agency over the phone. "Though we lost in the presidential poll, we will make good on that pledge."
While the main opposition party doubled down on its claim that citizens, after all, would be suffering from a "dreadful tax bomb,"
the ruling party said that they would not be swayed by the LKP's "demagoguery."
"The tax issue is a sensitive one that affects citizens' livelihoods ... Political circles have to deal with it with a sincere attitude and honesty," Choo said during a party meeting earlier in the day. (Yonhap)