Corporate tax rose as the key issue in the interparty quibble over funding welfare programs Tuesday.
In the annual budget review, finding funding for and prioritizing between free school meals and free child care surfaced as a major sticking point for the two main parties. The ruling Saenuri Party has backed the government in regarding free meals as a secondary issue, while the main opposition New Politics Alliance for Democracy considers free child care as less important.
In an attempt to resolve the issue, the NPAD is calling for corporate tax rates to be increased, with its floor leader Rep. Woo Yoon-keun spearheading the effort.
“Ending the tax-cut for the rich by hiking the corporate tax rates to the levels before 2008, tax revenues of more than 5 trillion won ($4.6 billion) can be secured,” Woo said in a radio interview.
He claimed that the current and previous administrations’ corporate tax policies have had the effect of lowering tax revenues by 9 trillion won since 2008.
“There are priorities in raising taxes. Before raising tobacco and automobile taxes, which is strongly resisted by the common man, corporate tax should be increased.”
The main opposition party is attempting to avoid getting bogged down by welfare-related issues as it calls for parliamentary investigations into development projects initiated by the previous administration, including the four-rivers restoration project. Key NPAD lawmakers including interim leader Rep. Moon Hee-sang have emphasized the need to move quickly.
The Saenuri Party has yet to set its official stance on the matter, but it is likely to resist attempts to raise corporate taxes.
“Going against the global trend of lowering corporate taxes to take more could damage the country’s competitiveness,” Saenuri Party deputy floor leader Rep. Kim Jae-won said citing the sluggish Korean economy.
“It is not the right stage to raise corporate taxes.”
The NPAD, for its part, appears likely to dig in.
“The main opposition considers corporate tax as the biggest issue in this regular parliamentary session,” NPAD deputy floor leader Rep. Ahn Gyu-baek said following the weekly ruling-opposition floor leaders’ meeting.
Overall, Tuesday’s meeting appears to have produced little more than being an opportunity for the parties to affirm their differences on a range of issues.
The parties leaders are said to have agreed simply to continue discussing the parliamentary investigations demanded by the NPAD, while the interparty negotiation group on resolving welfare funding issues suggested by Woo was reportedly left undiscussed.
By Choi He-suk (cheesuk@heraldcorp.com)
