Value context and insight. lkm@koreatimes.co.kr
Singles left frustrated with gov’t tax incentive plans for married couples with children
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By Lee Kyung-min
A woman in her 40s surnamed Kim couldn’t help but feel frustrated when she heard that the government plans to revise the tax code to expand incentives for married couples with children.
“Why should I be punished for not getting married? It’s my decision and mine alone. Greater tax benefits for married couples mean that people like me should be excluded. Is that fair? I don’t think so.”
A man in his 40s surnamed Park, who works at a commercial bank, also shared the sentiment.
“I am not happy about how I feel about not getting married. The government plan is not making it any better.”
He said he has yet to find a person he feels a strong enough connection to spend the rest of his life with.
“The feeling of being in control of my life is very important to me. I don’t see myself getting married anytime soon — probably never will — and that will not change. A significant portion of my income is taken from me in the form of taxes, and I have to pay more? This is infuriating, since the prices of everything are going up, but not my monthly income.”
The feeling followed the Lee Jae Myung administration’s pledge to streamline benefits for married couples and simplify tax codes for year-end tax settlements. Greater tax deductibles based on the income level and the number of children a family has are likely. According to the national policy planning committee and the finance ministry, the plan will help address the country’s chronically low birthrates.
Kim added that the revision favorable only to married couples will draw backlash from many single people like herself.
“Many single people like me are already paying a far greater share of income to pay taxes. The government is struggling to tackle low birthrates in a rapidly aging society. That is nothing new. However, opting to punish single people is not the way to do it.”
According to data from the OECD, singles in Korea paid 24.7 percent of their income in taxes last year.
This is far higher than the 13.5 percent shouldered by four-person households dependent on a single income earner.
This means that singles earning about 1 million won ($732) in monthly income will be left with only about 750,000 won after paying income taxes and monthly premiums for the state-run national pension and national health insurance, as well as other social security programs.
A four-person single-income household, in contrast, will keep close to 900,000 won.
Many single people are understandably frustrated with the tax increase plans, according to Lee Jin-sook, a professor of social welfare services at Daegu University.
“The government tax incentives are the surest way to give a clear sign indicating policy priority and continuity, but single people are right to feel frustrated since they have to back child care allowances for children that are not theirs,” Lee said.
Households with children are expected to be granted annual tax relief of between 2.4 trillion won and 3.2 billion won, according to the Korea Institute of Public Finance.
The figure will increase if the incentives are expanded to include credit card spending or other expenditures.
According to a report by the research institute, the “single tax” is justified in part because the spending needs of households increase based on the number of dependents.
“The current income tax levied on an individual basis ends up with an unfairly heavy tax burden on income earners with multiple dependents,” the report said. “This goes against the principle of taxation according to one’s ability to pay. Korea needs a more family-friendly tax code.”