Honorable members of the Assembly, and my respected fellow citizens. Today, I stand before this podium of the National Assembly with a heavy heart. (omitted)
On this land, where not even grassroots would grow amid the ruins of war, our people built semiconductors in a mere fifty years. This small nation, once struggling through the barley-harvest hunger season, is now armed with advanced materials and holds a key to the Fourth Industrial Revolution.
President Park Chunghee’s Gyeongbu Expressway, and President Kim Daejung’s information superhighway.
Over the past eighty years, Korea has splendidly accomplished the task of industrialization, and by preparing ahead even for the information age, it now shows formidable market share in mobile phones, automobiles, semiconductors, electronic devices, and more.
Over the past eighty years, a country that could not even make a single rifle now produces self-propelled howitzers with its own technology, and has even achieved the remarkable feat of exporting them to Europe. In addition, the Korean Wave boom that has swept the globe shows that our soft power, too, has grown to a world-class level.
Could our ancestors eighty years ago truly have imagined such a future?
Korea as one of the world’s top ten economic powers, one of its top five military powers, a cultural powerhouse whose songs ring out in theaters?
And we now stand before another calling of the times.
The irresistible, immense waves of green growth and AI now lie before us.
(remainder omitted)
*
After finishing his National Assembly speech with excellent eloquence, Kim Sangcheol was staring at the news with nothing but deep sighs.
[Breaking News—KOSPI Plunges!]
[Is the Ruling Party Getting Cocky About the KOSPI 5,000 Era? Closes Down Over 4% Amid Financial Investment Income Tax Controversy!]
The day after his National Assembly speech ended.
The KOSPI had plunged by over four percent, falling from 5,000 back toward 4,000.
It was inevitable. The tax law amendment he had mentioned in the National Assembly was already leading to controversy over the financial investment income tax.
“Goddamn it...”
Financial investment income tax.
Simply put, it was a policy that imposed a considerable tax if the money earned from stock investments exceeded fifty million won, and it was naturally a law that could only throw cold water on the securities market.
A government official stated that those with financial income of over fifty million accounted for less than ten percent of all investors, and that this was, in the end, a tax increase on the wealthy. But people were not that stupid. If those wealthy people sold off their stocks because they hated the tax, it was obvious that stock prices would fall.
“Mr. President. The Cabinet meeting has concluded.”
As he was staring off into the distance alone, Prime Minister Lee Chanho opened the door to the office with a dark expression.
“Yes. What conclusion did they reach?”
“Well, that is...”
“Speak honestly. I’ve more or less expected it.”
“...The majority of the Cabinet members expressed opposition. Not only the ministers, but both inside and outside the party, opposing views are somewhat more dominant.”
The president clenched his fist tightly.
Regrettably, opposition to the financial investment income tax was far greater than support.
The ministers of the three economic agencies—the Ministry of Economy and Finance, the Financial Supervisory Service, and the Financial Services Commission—were glaring fiercely, and even within the party, which was generally in favor of tax increases, there were many who were neutral or in favor of postponement.
“The Ministry of Economy and Finance opposed it too?”
“Yes. I was told there was strong opposition from the Tax and Customs Office...”
“No, I can understand lawmakers doing that because of votes, but what’s with the Ministry of Economy and Finance opposing it?”
Ironically enough, the financial investment income tax faced the most opposition within the Ministry of Economy and Finance.
Lawmakers were doing it because of votes, and the Financial Services Commission and Financial Supervisory Service had their original duty of supporting the securities market, so that was understandable at a glance. But it was utterly incomprehensible for the Ministry of Economy and Finance, which managed the nation’s coffers, to express opposition.
Their logic was that if the financial investment income tax were implemented, the number of investors would decrease, reducing the total amount of tax revenue... but if one followed that line of reasoning, one had to wonder whether there was any such thing as a good tax in this world.
“This is unbelievable. Truly unbelievable. I’m saying I’ll take the bullet because we can’t just stand by and watch the fiscal deficit, and the Ministry of Economy and Finance opposes a tax hike?”
“...”
“Prime Minister, go to Minister Park and tell him straight. It’s obvious he’s already managing his image because he wants to wear a gold badge after retirement, so if that’s the case, tell Minister Park to propose the tax law amendment himself!”
Kim Sangcheol’s insides boiled.
At present, Korea did not need just a penny or two in taxes. From buying up taxi licenses to renewable energy, everything began with money and ended with money.
The one fortunate thing was that Korea’s fiscal deficit was relatively sound.
What remained now was to pour the budget saved in this way into R&D and future industries while searching for next-generation growth engines. Yet even the Ministry of Economy and Finance was not cooperating in securing that seed money, so he was furious enough for his hair to stand on end.
“Prime Minister, speak honestly. Am I doing something foolish right now?”
“...”
“If we want to pay master’s and doctoral researchers what they’re worth and nurture domestic engineers, shouldn’t the government obviously have money? To hell with the future or whatever—should I just issue government bonds like mad and pass the bomb to the next administration?”
For some reason, Kim Sangcheol felt particularly resentful of his predecessors today.
His half-brother, famous for being a good man, had given generously to the people, and the previous administration had delighted the people with tax cuts.
Thanks to that, the debt-to-GDP ratio, which had been thirty-eight percent ten years ago, had snowballed to fifty-four percent.
“I’m not an idiot. If I just close my eyes once and issue government bonds, the debt ratio will hit seventy percent during my term. Should I take the easy road too?”
Fortunately, Lee Chanho restrained Kim Sangcheol, who was thoroughly agitated.
“That would naturally not be right. The calling of our era is something we must overcome ourselves.”
“Then what am I supposed to do? I’m saying I’ll take the lead and propose the tax law amendment, but no one is joining me.”
“First, don’t worry about the party line. Even if there are no lawmakers publicly in favor of the tax law amendment, there won’t be any lawmakers casting opposing votes at the plenary session.”
“And the ministers?”
“With a majority of seats, what influence would the Cabinet have? I will keep their mouths shut until it passes the plenary session.”
Fortunately amid misfortune, the political landscape was favorable.
The Daehan Party had already adopted opposition as its party line and announced that all of its members would boycott the plenary session, but fortunately, 110 seats could not exert a major influence over key matters of state administration. The ruling party had the authority to propose and pass it on its own.
“However, there is one concern.”
“Concern?”
“The fact that we will propose and pass it ourselves means we will shoulder all the criticism. I am worried about the worsening of public opinion that will follow.”
Kim Sangcheol asked while pressing his fingers against his brow.
“Is public opinion that bad?”
“...After the National Assembly speech, the KOSPI plunged by four percent. But many experts predict that even this is only the beginning.”
“What are the industry forecasts?”
“A tax that did not exist before is being imposed. Who would welcome the financial investment income tax? If we combine the opinions of the majority of experts, they say the KOSPI could fall to the 4,000 range. More conservative forecasts say it could even break below 4,000.”
“No, then does that mean Korea can never impose a financial investment income tax? Among major countries, we’re the only one without a tax here.”
“...Of course not. Still, the fortunate thing is that with the recent overlapping semiconductor cycle and future growth engines, the KOSPI has finally resolved its discount. The initial shock is unavoidable, but it is expected to normalize quickly.”
The problem was that no one knew how long that initial period would last.
“This is frustrating. Truly frustrating.”
Kim Sangcheol smiled bitterly.
“If I followed my heart, I’d want to throw it all away too. Since ancient times, no king who raised taxes ever died of old age. I don’t know if I’ll end up dying while blocking arrows myself.”
“If it is that point, please do not worry. There will absolutely be no motion for impeachment proposed during your term.”
“Am I really throwing cold water on the KOSPI when the mood is so good?”
“Well... put another way, there is no better opportunity than this. At least for now, opposition to the financial investment income tax will be at its lowest.”
Just three years ago, whenever the KOSPI seemed about to rise, some incident would erupt and send it slamming back toward 2,000.
Public opposition to the financial investment income tax had been so overwhelming that no one had dared even bring it up. Of course, even now opposition was higher than support, but compared to those days, it was a luxurious complaint.
After a long silence, Kim Sangcheol opened his mouth.
“Prime Minister.”
“Yes.”
“Then let’s do it. There’s no benefit to dragging out talk of a tax increase anyway, so let’s handle it swiftly.”
“Then...”
“Draft an initial version within next week and set up a public schedule with the opposition party. Of course, there’s no way they’ll help, but at the very least, we need to give the impression that we tried to cooperate.”
“Understood. If the opposition party refuses to cooperate at all and drags this into factional politics, I will point out the tax-cutting policies implemented by your predecessor.”
“Yes, please respond well in the battle over public opinion too. And.”
Kim Sangcheol spoke with a smileless face.
“Deliver my warning to Minister Park. Tell him that I find it extremely disappointing and concerning that, of all people, the Ministry of Economy and Finance is opposing a tax hike.”
*
“Is everyone here?”
—Yes.
“Then let’s start the meeting quickly.”
When the KOSPI, which had been loitering around 5,000, collapsed all the way to the 4,500 line, the pension fund’s risk team held what was, for the first time in a while, a proper meeting.
The division head, who had attended a meeting for the first time in ages, asked with a dry expression.
“I’ll skip what everyone already knows and get straight to the point. The financial investment income tax—what do you think will happen?”
Department Head Oh of the risk team opened his mouth heavily.
—I apologize, but I think they will push it through. The ruling party has already produced a draft, and yesterday they scheduled a public event with the opposition.
“But that ended in a breakdown. From the atmosphere, it looked like the opposition leader was practically cursing them to their faces.”
—Yes, but they have 110 seats... There are almost no people inside or outside the Minguk Party who oppose the tax law amendment. The party line seems practically decided, and it appears to be only a matter of time before it passes.
At present, the opposition party was responding to the government’s tax law amendment with an extremely hard-line move.
A relay hunger strike.
The 110 lawmakers had begun taking turns fasting for one day each, and because there were so many elderly lawmakers, there was serious concern that someone might collapse from hypoglycemic shock.
“You’re saying it will pass without much trouble? Then what will be the market impact?”
—Honestly, it is difficult to predict at this point. In the fifteen days since the Blue House’s National Assembly speech, the KOSPI has fallen by 500 points. Some are concerned that it may approach 4,000. Since uncertainty in the market has grown, there is an opinion that we should make portfolio adjustments as well.
The division head nodded with a dry expression.
“Yes, there’s nothing as frightening in stocks as uncertainty. It seems to me as well that there will be considerable growing pains until it passes the plenary session. Does anyone have another opinion?”
I raised my hand.
“Division Head, then we should buy more.”
“...What?”
“If prices have gotten cheaper, we should buy. This issue will normalize soon.”