Whether to introduce the financial investment income tax is still unresolved within the ruling camp even recently, with six months left before the Lee Jae-myung administration marks its half-year in office. The introduction of the tax, which is levied on income earned from investments in stocks, bonds, funds, and derivatives, was proposed in the past by the Democratic Party. When the Yoon Suk-yeol administration tried to scrap the tax, the Democratic Party opposed it. But as President Lee Jae-myung tilted toward abolishing the tax during the presidential campaign, the Democratic Party also stepped back.
So where does the ruling camp stand now on introducing the financial investment income tax? Presidential Chief of Staff for Policy Kim Yong-beom said in a ChosunBiz interview on the 3rd, "If stock prices stabilize and, even if they fall a bit, the band (price range) shifts to a different level, not at the 3,000 level but around 4,000, then cynicism about the domestic stock market will fade," adding, "If this kind of boom becomes the new normal to the point where we can say it is not an 'exceptional phenomenon,' then we should reorganize the premises, including the existing taxes system."
Kim went on to say, "Instead of being elated or dejected by (the current stock price level), we should look at the market calmly and consider broadly how much the National Pension Service is investing in the domestic market," adding, "If we judge that the capital market is good for building national wealth, then that is when we should discuss reintroducing the financial investment income tax."
Kim also said, "Do we have systems that allow ordinary people to participate in investments easily and broadly, such as ETFs and retirement pensions? Other than those who woke up early, participation is not broad," adding, "In the United States, stocks have kept rising for the past few decades, but here people are still tilting their heads, saying, 'Won't it soon burst?' 'Why is it lasting so long?' Only Yeouido (the securities district) is excited."
A person in the securities industry said, "It feels like the ruling camp is still keeping its distance from introducing the financial investment income tax," adding, "I think the conclusion will change depending on how the stock market performs going forward."
The Democratic Party, the government, and the presidential office held a high-level party-government meeting on the 9th, but there was reportedly no discussion of the financial investment income tax. An official at the presidential office said, "There was a consensus that inducing high dividends to revitalize the stock market should come first," but added, "There was no talk of the financial investment income tax, and it seems unlikely to come up for the time being." A lawmaker on the Democratic Party leadership also said in a phone call with ChosunBiz, "There had been continued talk, even before the presidential election, that we should revisit the financial investment income tax when the factors behind the domestic market's undervaluation are resolved," but added, "The financial investment income tax issue should be taken up next year or later; now is not the time."
There is also analysis that a "learning effect" is at work in the presidential office's keeping its distance from the financial investment income tax. Earlier, when trying to adjust the threshold for large shareholders subject to stock capital gains tax from "5 billion won per issue" to 1 billion won, they met public backlash. In the end, on the 100th day in office, President Lee announced that the large shareholder threshold would not be changed.