By Lee Tae-hoon
A lawmaker of the ruling party urged an immediate introduction of a unification tax, Thursday, saying an extra dollar per month from each taxpayer may not suffice, but it was necessary to better prepare for a possible collapse of the North Korean regime.
“How much money are you willing to spend if you or your family member is seriously ill, or to correct distorted history?” asked Rep. Kim Choong-whan of the governing Grand National Party (GNP) in a public hearing on whether to levy a unification tax at the National Assembly.
“How could anyone object to collecting a dollar or $10 per month, which would pave the way to make the size of the country twice as big, salvage their 22 million brethren in the North and write a new, bright chapter of history?”
A survey of the National Unification Advisory Council in March found that 52.4 percent of respondents were willing to pay the unification tax.
Of them, 57.6 percent said they wanted to contribute less than 100,000 won per year ($89); 23.3 percent said they were ready to pay between 100,000 and 190,000 won; 4.1 percent between 200,000 and 990,000 won; and 9.1 percent more than 1 million won annually.
Estimated costs for a successful unification of the two Koreas range from as little as 7.3 trillion won to as much as 5 quadrillion won, but what’s certain is that the sooner people start collecting money for it, the easier it will be, the lawmaker said.
The Presidential Council for Future and Vision estimates South Korea could shoulder a bill of 2.5 quadrillion won if the North Korean regime suddenly collapsed.
The Rand Corporation, a U.S.-based think tank, projected in 2005 that up to $670 billion would be needed to double the gross domestic product level of the Stalinist North within five years in the wake of unification.
During the hearing, lawmaker Kim proposed three alternatives in collecting a unification tax, while avoiding a strong public backlash due to a sudden increase.
He said the government can raise an additional 3.8 trillion won if it increases income tax by 5 percent, corporate tax by 3 percent and gift tax by 30 percent.
Under the plan, workers with a monthly income of less than 2 million won will need to pay 1,200 won more per month, those with a monthly paycheck of between 2 million and 4 million won 4,380 won.
If people reject the idea of paying additional tax, the government may squeeze the state-budget of some 220 trillion won, and spend 1 percent of it to prepare for unification, the lawmaker said.
As a last option, he said the government can raise some 2.3 trillion won each year by raising value-added tax by 0.5 percent.