A proposal to levy a "special-purpose tax" on conglomerates' excess profits and use it for research and development (R&D) investment and youth hiring emerged on the 14th.
On the day, the Ministry of Employment and Labor (MOEL) held a forum titled "A new path of social innovation in step with artificial intelligence (AI) technology innovation" at Peace & Park in Yongsan District, Seoul. The forum was initially scheduled to be held on the theme of a Korea-style social solidarity wage inspired by Sweden's solidarity wage, which reduces wage gaps among workers in the same industries and sectors. But it was postponed once after controversy arose over the government intervening in corporations' wage issues.
Jeong Heung-jun, a professor at Seoul National University of Science and Technology who delivered the keynote presentation at the forum, said, "The high profits of our semiconductor corporations are welcome," but added, "Distributing the outcomes of technology-hegemon corporations is difficult to resolve with traditional methods like now." Jeong said, "Performance distribution that considers the stakeholders who have contributed to corporations' growth can guarantee both the continuous development of corporations and the development of the industrial ecosystem."
Jeong then called for introducing a special-purpose tax. He said it would not be unreasonable to introduce it, given the existence of the "reconstruction excess-profit recapture system," under which the state recoups part of the development gains from redevelopment projects. Jeong said, "It would be designed as a special tax used only for a specific purpose, not a general tax." He added, "It can be used only for its original purposes—such as in-corporation R&D investment, industrial complex modernization, youth hiring, and improving the welfare of subcontracted and small, micro business sites workers—to enhance industrial competitiveness."
Business circles expressed opposition. Hwang Yong-yeon, an executive director at the Korea Enterprises Federation (KEF), said, "Demands to further distribute even operating profits run counter to the basic principle of the capital market that risk and reward must be balanced." Hwang said, "The order of efforts to build a virtuous cycle for AI transition is not a discussion on how to distribute profits," adding, "We should make supporting corporations' innovation and transitioning the labor market for the AI era the main tasks."
Lee Sang-ho, head of the Economic Headquarters at The Federation of Korean Industries, also said, "Corporations' profits are the core driving force that leads innovation and investment in our society and are the foundation of the free market economy and capitalism." Lee said, "Profit is a reward for innovation and a market signal that drives investment and production, and seeing it only as something to distribute distorts the efficient input and allocation of resources."