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Gov't should hike tax rate for high-income earners: lawmaker

Sept. 14, 2015 - 09:22 By KH디지털2
The government should increase the tax rate for high-income earners in order to help ease the gap between the haves and have-nots, an opposition lawmaker said Monday.

Citing data provided by the National Tax Service, Rep. Oh Jae-sae of the main opposition New Politics Alliance for Democracy said the top 100,000 income earners in the country took home an average of 470 million won ($398,000) in 2013.

In terms of earned income alone, the top 100,000 got paid an average of 274.4 million won in the same one-year period.

The NTS data also showed that the top 100 super rich received 21.29 billion won in all types of compensation, with earned income hitting just under 6.64 billion won. 

The effective tax rate for the top 100 stood at 29.2 percent, while it stood at 20.1 percent for the 100,000 highest-paid workers. An effective tax rate is the average rate in which an individual is taxed.
 
In contrast to the affluent, the national average stood at 30.36 million won per annum, while roughly half of all people in the country took home less than 19.75 million won from their jobs in 2013.

The earnings level of the top 1 percent stood 10.7 times the national average, while the top 10 percent got 3.7 times more.

The lawmaker said that before taxes, the top 1 percent in the income bracket accounted for 10.7 percent of the total wealth, with this number only falling to 8.7 percent after taxes. He said that the difference between before and after taxes decreased, and that it was almost nonexistent for those that made up the top 7-10 percent of the country's income earnings hierarchy.

Oh said that the lack of difference is a sign that the government is not slapping the rich with enough taxes and offering too many tax breaks.

"There is a need to raise tax rates for the rich, and cut back on various tax breaks and deductions so as to reduce the income gap," the lawmaker said. (Yonhap)