There is intense backlash within the party regarding the tax reform plan announced by the government and the Democratic Party of Korea. Although the Lee Jae-myung government has promised to revitalize the domestic stock market, and the KOSPI index has continued its rally since the new government's launch, the tax reform plan agreed upon by the government and the party is seen as counterproductive.
Democratic Party of Korea lawmaker Lee So-young said at a meeting held on the 29th at the Korea Exchange in Yeouido, Seoul, titled 'Democratic Party of Korea KOSPI 5000 Special Committee Korea Exchange On-site Meeting,' "If the government and the ruling party only push for regulations, achieving KOSPI 5000 will be difficult. Trust in politics is also important for the recovery of the stock market, and actual related policies need to be implemented; opposing policies should not be pursued."
At the meeting, special committee members and exchange executives discussed the recent amendments to the Commercial Act and measures to combat unfair transactions in the stock market. Special Committee Chairman Oh Gi-hyung, along with lawmakers Kim Nam-geun, Min Byeong-deok, Park Hong-bae, Ahn Do-geol, Lee Gang-il, Lee Jeong-moon, and Lee So-young attended.
Earlier that day, the government and the ruling party held a policy consultation on the 2025 tax reform plan and announced that the criteria for major shareholders, who are subject to taxation on capital gains tax, would be lowered from 5 billion won to 1 billion won, a change from the previous easing under the Yoon Suk-yeol administration. Currently, only major shareholders holding more than 5 billion won in listed stocks pay capital gains tax, but soon even those holding more than 1 billion won will be required to pay taxes. The plan to raise the corporate tax rate from the current 24% back to 25%, the level in 2022, is also being pursued.
Lawmaker Lee So-young pointed out regarding the announcement from the policy consultation, "While it is said that funds concentrated in real estate should move to the stock market, who would invest in the stock market if the tax reform is announced in the opposite direction?"
He continued, "Looking at the contents of the policy consultation, there is no emphasis on strengthening taxation on the real estate market, and there are only policies aimed at increasing tax revenue from the stock market," adding, "From the public's perspective, there can only be doubt about whether the new government has the will and a concrete plan to move funds concentrated in real estate to the stock market."
Regarding the strengthening of the capital gains tax criteria for major shareholders, Lee stated, "When the major shareholder capital gains tax threshold was 1 billion won, there was a surge of tax evasion every year-end," and added, "The average price of an apartment in Seoul is said to be 1.4 billion won. It must be considered how citizens would rationally think about defining someone who meets the income tax law's major shareholder criteria with a threshold lower than the price of an apartment in Seoul."
Lee pointed out that there had not been enough internal discussions regarding the tax reform plan. He said, "There has never been a discussion within the Democratic Party about the reform direction, including the stock market tax, and there has been no internal discussion in the KOSPI 5000 Special Committee."
However, the remaining lawmakers expressed a somewhat cautious stance. Lawmaker Oh Gi-hyung remarked, "Tax issues are sensitive," but noted, "While I agree that a money move from real estate to the capital market is necessary, and that needs to be policy-consistent, strengthening the real estate tax is a different area." Lawmaker Lee Gang-il stated, "We will ensure that opinions agreed upon within the party will be put forward through public discussions."