Jae-myung Lee, 'dividend system' instead of land tenure tax... Just change the name and try again

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The Real Estate Reform Commission, an organization directly under the Democratic Party's presidential candidate Lee Jae-myung, introduced the 'Land Profit Dividend System' with the start of its official activities on the 28th. Candidate Lee took a step back, saying, “The people should not oppose the land tenure tax and basic income,” but in effect, the next administration under the name of the land ownership tax, which is the same concept as the land tenure tax, said that he would promote it.

The Real Estate Reform Committee, chaired by Lee Sang-kyung, a professor of urban planning and landscape architecture at Gachon University, known as Lee's 'real estate mentor', held an inauguration ceremony at the Democratic Party of Korea in Yeongdeungpo-gu, Seoul on the 28th and started its activities. In the declaration, Chairman Lee said, “The policy to overthrow the republic of unearned real estate is to introduce a land profit dividend system. This will block unearned income from real estate.”

Even before the presidential election, the land ownership tax and basic income were Lee's two key promises. The plan is to create a new land ownership tax to recover unearned income from real estate, and to use it as a source of basic income. However, as controversy over tax increases ensued, Candidate Lee did not mention the land tenure tax for more than 20 days, including the 7th. Instead, Lee focused on claiming to alleviate tax burdens such as capital gains tax (transfer tax) and comprehensive real estate tax (special property tax). However, the real estate organization directly under the candidacy claimed once again its will to promote the land profit dividend system, which is the same concept as the land tenure tax on the first day of its launch.

Candidate Lee's side brought up the term 'land profit dividend system' because it was judged that the name of the land tenure tax caused a backlash. A passport official said, "The land ownership tax is basically to distribute income, but there is a misunderstanding as if it is a tax increase because of the name 'tax'. Earlier, in an interview with the media on the 1st, candidate Lee also said, "The overwhelming majority benefit from it, but there are many objections to the word 'tax'. I named it wrong, but I am thinking of changing the name to ‘Land Profit Dividend’.” In fact, the name was changed to 'dividend' after removing 'tax', which can have a negative meaning.

However, the concept of the land tenure tax and the land profit dividend system is the same as that tax is levied on everyone who owns land. Under the current ownership tax system, different tax rates are applied to land for different uses, such as commercial land or farmland, but Lee plans to apply the same tax rate to land with similar prices. However, even within the passport, the argument that "the tax rate should be lowered for land for business use or single-family dwellers" is not strong enough, so it seems that it will be quite a pain before it becomes a reality. As if conscious of this point, candidate Lee did not specifically mention the timing of the implementation of the land profit dividend system.

The opposition party strongly opposed the proposal for a land profit dividend system. Hwang Gyu-hwan, spokesman for the People's Power Election Countermeasures Committee, said, "The unripe discussion aggravates the confusion of the people. What is the sincerity of the candidate, and what is the real promise of this candidate?”

The retrospective application of tax relief, which Lee has shown strong will, has not overcome the government's opposition. At a press conference on the same day, Park Wan-joo, chairman of the Democratic Party's policy committee, said, "The government has made clear its position against the retroactive application."

Candidate Lee, who insists on easing transfer tax and property tax, also criticized the Moon Jae-in administration's real estate policy on the same day. Candidate Lee said at a forum invited by the Korean Regional Journalists Club, “The policy to curb demand has failed.