Tax authorities should conduct fair, just investigations
The National Tax Service (NTS) plans to conduct extensive tax audits to block inheritance of wealth through illegal and irregular means.
The NTS' move is appropriate to realize a just society. Korea has long been a society where parents' wealth determines their children's economic and social status. The time has long past for the nation to rectify this inherent inequity.
According to a report by the OECD, the average income of the top 10 percent here is 10.1 times larger than that of the bottom 10 percent, higher than the OECD average of 9.6 times.
The rich-get-richer, poor-get-poorer vicious cycle aggravates the already severe social conflict. And that also explains why ordinary citizens are calling for strict and fair tax investigations.
The NTS is right in this regard to target the 50 largest family-controlled conglomerates and wealthy individuals suspected of inheriting or giving their wealth to their children in irregular and suspicious ways. Tax officials should scrutinize corporate capital changes, transfers of management control, and internal transactions between subsidiaries, here and abroad.
A case in point is the suspected tax evasion by Korean Air Chairman Cho Yang-ho and his four siblings for the wealth they inherited from Hanjin Group founder Cho Choong-hoon. The five paid an inheritance tax in 2002 but said they discovered additional overseas assets in 2016 they were entitled to inherit, and revised their tax payment to the tax authorities recently. Two questions remain, however: How could they not know of substantial overseas assets for 14 years? And why did they report it only after prosecutors began investigating?
Korean society is returning to a caste system, with upward social mobility weaker than ever. According to a study, gift and inheritance accounted for 27 percent of asset formation in the 1980s, but the equivalent ratio soared to 42 percent in the 2000s.
It is this reality that frustrates an increasing number of young people before they even set foot in society. How can Korea have hope if its younger generations cannot dream of making a better future with their own efforts?
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