The governing Grand National Party (GNP) is struggling to shake off its image as a political party favoring the rich and big businesses. The struggle has gained momentum since its candidate lost out to an independent civic activist with broad opposition support in the Oct. 26 Seoul mayoral by-election.
We positively assess such a move by the GNP to regain the trust of disaffected people by revising its conservative policies. The party is studying ways of increasing tax rates for wealthy individuals and family-controlled conglomerates, or chaebol. However, it will not be easy for the party to change its course for the poor and underprivileged overnight.
The GNP may face great challenges from within and without if it decides to collect more taxes from the top income bracket and large businesses. Reform-minded young lawmakers are now spearheading the revamp of the party to woo voters well ahead of general elections and a presidential poll next April and December, respectively. But they have to overcome stringent resistance from stalwart conservatives.
Possible tax hikes would also spark strong opposition from the rich and chaebol owners who are already dejected at the government’s withdrawal of additional tax cuts. Of course, tax reduction proved to have little trickle-down effect to stimulate consumption, boost the economy and create jobs. But there are worries that higher taxes might discourage investment and weaken business sentiment, thereby worsening the already stagnant economic conditions.
It is important to build a social consensus on the tax issue. The GNP has given the impression that it is rashly changing its policies in a desperate bid to reverse the trend of nose-diving public support for the party. It is even running the risk of giving up its conservative political identity and moving toward the left. Its members seem to resemble lawmakers of liberal parties, such as the main opposition Democratic Party (DP), who call for tax increases for welfare programs for the poor.
The idea of tax hikes is reminiscent of U.S. billionaire Warren Buffeft’s proposal to let the super-rich pay more. His proposal has drawn attention from across the globe as he is willing to share a more equitable and fairer burden with the working class. However, such an idea has touched off a strong backlash from conservative Republicans who fear that a class war may erupt between the rich and the poor.
Against this backdrop, more taxes for the haves could apparently have great repercussions not only for the economy but for Korean society as a whole. The ruling party and the government cannot raise taxes without reaching a national consensus. They have come under criticism for having done little to stem the widening gap between the haves and have-nots by sticking to pro-business policies.
Now the GNP should reflect on its negligence in narrowing social polarization. And it must demonstrate it has a genuine intention of bridging the wealth gap by imposing higher taxes on the rich. If the party is only interested in luring back disgruntled voters with a populist policy, the tax hike idea may go nowhere.
Voters are already fed up with the political establishment tainted by corruption, incompetence and maladministration. As seen in the by-election, they have rejected party politics of both the ruling and opposition camps. They are now craving for new politics and new leaders who can better take care of their problems such as soaring inflation and rents, unemployment, dwindling income and financial hardship.
That’s why the GNP should press ahead with drastic reforms to be reborn as a party to present a new vision and a better future to the people. It can never win back the hearts and minds of voters without reform. The tax increase issue should be tackled in this context. Otherwise, no one will trust the GNP and its demise might be inevitable as the people’s anger grows over its outdated party politics.