No Love for Welfare in South Korea
“To each according to his needs, from each according to his ability.” First used by 19th century French historian and socialist Lous Blanc, this slogan was later popularized by Karl Marx. It reflects the logic and justification of modern welfare policies and is still evoked by politicians and social activists today. Most recently, Gordon Brown used it in his defense of the United Kingdom and the National Health Service (NHS) during his “Better Together” speech, a stump for the Scottish independence vote “No” campaign.
But not everyone feels the same. The problem with welfare is that it requires people to pay into a pot from which they may not directly benefit, and its expansion usually requires rising taxation. Distribution is a political matter through and through: a question of who gets what, when, and how. So it should come as little surprise that two of the hottest policy issues in South Korea right now (welfare and taxes) reflect significant divides within society and between the state and society. Most troubling for social democrats, liberals, and left-leaning peoples, is that welfare expansion does not seem to enjoy popular support.
This is, of course, not entirely surprising. Paying more taxes is almost never popular. But one should still be somewhat surprised when a government, which campaigned on increasing welfare, holds steady to the position that there should be “welfare without tax increases” [증세 없는 복지] or, worse yet, support for welfare cuts by a ruling party. This is the case in South Korea, a “late” industrializer that was “catching up” while the rest of the (developed) world was undergoing welfare state expansion. Now that South Korea has “caught up” to the “international trend” (국제추세), as some South Korean politicians like to call it, that trend is toward welfare state retrenchment.
On Wednesday, JTBC ran a short segment during “News Room” (hosted by Seon Seok-ki) based on a recent public opinion survey about peoples’ opinions regard the economy, welfare, and tax increases. The findings, while not definitive, are telling. The transcript of the report is translated below.
“[Opinion Poll] What Do People Think about Tax Increases and Welfare?… ‘Paying Higher Taxes is a Burden’” [[여론조사] ‘증세·복지‘ 국민 생각은?…”세금 더 내는건 부담“], JTBC, February 4, 2014.
Anchor [Seon Seok-ki]:
Tax increases and welfare have reemerged as two major topics of discussion nationwide. What do the people who actually pay taxes think about these issues? JTBC commissioned the public polling organization Real Meter to find out. Skipping to the conclusion first, “These are not the circumstances in which to be paying more tax.”
Park Seong-tae reports.
A hole has developed in the country’s finances. We asked what the solution is, and 46.8% of respondents said that it is to decrease welfare.
This is more than 10% higher than the percentage of those who said taxes ought to be increased.
These responses show that people think a tax increase would be burdensome in light of difficult living conditions.
[Na Sung-hyon/self-employed: “If income taxes were to increase, the self-employed would have almost nothing left.” [소득세도 올린다면 자영업 해봐야 남는 게 거의 없다고 봐야죠.]
[Kim Mi-kyong/Sangam-dong, Seoul: What they said is that [tax increases] are for welfare, but that does not resonate with me. [말은 복지를 위해서 했다고 하는데 저희 입장에서는 와 닿지 않고요.]
The government remains averse to an increase in the corporate tax rate.
[Choi Kyong-hwan/Deputy Prime Minister for Economic Affairs: “Even though Japan’s public finances are considerably worse than our own, they plan to decrease corporate taxes. We must stay somewhat in line with the international trend….” [지금 일본도 국가재정상황이 우리보다 훨씬 나쁜데도 법인세를 내리겠다는 계획을 가지고 있고, 국제추세와 어느 정도 밸런스를 맞춰야…]
The public, however, thinks differently.
More than half of respondents support an increase in the corporate tax rate (52.8%). Less than half that number opposes it on the grounds that it would burden the economy (22.9%).
In addition, in the event that taxes have to increase, the percentage (59.7%) that thinks we should increase the corporate tax rate is more than ten times (6%) the number that says income taxes paid by individuals should go up.
[Lee Taek-soo/Real Meter spokesperson: “There is resentment that in the process of the recent tobacco price rise and upheaval over end-of-year tax adjustments not all classes were affected equally; this [is shown by] public opinion critical of tax increases…” [최근 담뱃값 인상과 연말정산 파동 과정에서 계층별로 공정하지 못한 세금 부과에 대한 거부감이 증세에 대해 비판적인 여론으로…]
This JTBC-commissioned Real Meter poll asked 8,500 adults across the country, with a response rate of 8.5%, a confidence level of 95%, and a margin-of-error of ±1.1%.
Source: “[Opinion Poll] What Do People Think about Tax Increases and Welfare?… ‘Paying Higher Taxes is a Burden’” [[여론조사] ‘증세·복지’ 국민 생각은?…”세금 더 내는건 부담”], JTBC, February 4, 2014. Translation by Steven Denney.