Nation needs to
real estate policy
The Park Geun-hye administration is now going all out to reinvigorate the dormant housing market, reducing new supplies and lowering taxes. Will these measures work? Yes, but only
. Should the government repeat this approach whenever the property market sags, then? No, definitely not.
In a joint news conference of economic ministries Monday, officials announced their decision to cut
acquisition taxes, saying that they will
details, including a lowered rate, by the end of next month.
The government is basically going in the right direction, because the property purchase tax of up to 4 percent here is far higher than most advanced countries, such as the United States (1 percent), Canada (1.3 percent), and Britain (2 percent). But the nation’s tax rate for holding properties, at 0.2-0.4 percent, is way below those of industrial countries, which averages at around 1 percent.
That means, if the government lowers acquisition tax without raising property-holding tax, it will result in a big hole in the already
ing revenue base.
It is a small surprise then that provincial governors and mayors of metropolises, who heavily rely on property purchase tax, a major local tax, issued a statement opposing the central government’s decision. The finance ministry promises to take all means possible to make up for the loss, but provincial officials know too well that the central government will not be able to increase property-holding taxes for fear of popular resistance. Other make-shift steps will also prove to be little more than temporary soothers, as long as total revenue remains the same.
Moreover, industry experts doubt whether the acquisition tax will have any lasting effects on perking up the housing market.
It will be natural for policymakers to reconsider a policy if it has vague long-term effects in contrast to clear and immediate negative effects. But chances are slim that these officials will retract their policy because the decision came at the behest of President Park, who recently chided her economic czar, Hyun Oh-seok, deputy prime minister for economy, for failing to show strong leadership by coordinating conflicting interests between different ministries and central and local governments.
In a worse-case scenario, the scheduled lowering of acquisition tax could end up mainly benefitting home builders at the expense of working-class people because the financially-pinched local governments will squeeze their belts in public welfare programs, including free childcare.
Enlivening the home market is one of the easiest and quickest means of jumpstarting the moribund economy in many countries. One of the countries that should not yield to such temptation is Korea, a country which has long seen the adverse effects of property speculation and many experts believe that property bubbles still remain.
Taxes alone cannot revitalize the housing market, which is decided also by the overall economy, household debt, demographics and interest rate as well as short-term demand and supply. The fundamental solution lies in bolstering the economy and increasing disposable income for workers.
Up to 70 percent of Koreans still regard homes as objects for investment and even speculation with the other 30 percent seeing them as places to live. Until that ratio reverses, policymakers should not resort to property markets as a stimulus.
It is a short-term remedy but a long-term disease.
This is The Korea Times editorial for Thursday, July 25, 2013.
※ 다음에 나오는 문제들은 본 사설에 나오는 중요한 어휘들로 구성된 토익, 토플, 텝스 기출 및 예상 문제입니다.
※ Choose the one word or phrase that best keeps the meaning of the highlighted part.
1. The government agreed to
the country's economy in which Korea's long-neglected banking crisis finally lead to an IMF bailout.
① develop gradually
② inflate
③ examine thoroughly
④ boost rapidly
⑤ invest
2. Disappointedly, such steps are slow to produce tangible results. We cannot but say that policymakers have only taken
measures.
① fundamental
② makeshift
③ drastic
④ specious
3. Market position is also now an
, as factories used to be.
① expense
② property
③ plant
④ disadvantage
4. Washington has promised to
$270 million in new aid.
① overtake
② keep up with
③ offer
④ make use of
5. When a muscle is made to
by regularly repeated stimulation of its motor nerve, it continues to respond for a very long time.
① relax
② extend
③ contract
④ lengthen
⑤ leap
[해설 및 정답]
1. [번역] 정부는 한국에서 오랫동안 무시되어온 금융위기가 마침내 IMF 긴급 구제를 받게 되는 결과를 가져 온 국가 경제를
동의했다.
[정답] ③
2. [번역] 실망스럽게도, 그러한 조치는 구체적인 결과를 산출하기에 더디다. 우리는 정책입안자들이
조치만을 취해 왔다고 말하지 않을 수밖에 없다.
[어휘] temporary 임시변통의, 미봉책의(makeshift, expedient)
[정답] ②
3. [번역] 과거엔 공장들이 그러했던 것처럼 시장의 위치(입지)도 또한 요즘은
이다.
4. [번역] 워싱턴(미국의 초대 대통령)은 새로운 원조금으로 2억 7천만 달러를
약속했다.
[어휘] come up with (계획, 안건 등을) 내놓다, 제시, 제안, 제출하다(think up, suggest, propose, present, bring up, bring forward, adduce, put forth, set forth); 따라잡다(overtake, catch up with)
5. [번역] 규칙적으로 반복되는 운동신경의 자극에 의해
될 때, 근육은 아주 오랜 시간 동안 계속하여 반응한다.