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What do former Daewoo Group Chairman Kim Woo-choong, singer Koo Chang-mo, and TV actress Kim Hye-seon have in common?
These public figures, seemingly having nothing in common, are on a list of about 21,000 individuals and corporations who have not paid taxes exceeding 200 million won ($183,000) for one year or longer. The National Tax Service (NTS) names and shames these "large-sum tax delinquents" every year as part of its revenue-boosting drive.
Many of these tax defaulters are wealthy people who travel abroad frequently and drive imported vehicles. To dodge taxes, some get fake divorces and hide their assets in various ways.
Rampant tax avoidance by high-income professionals and individual proprietors has long emerged as a social problem, as it can cause "tax resistance" among honest taxpayers. According to the Bank of Korea (BOK), tax officials grab nearly 95 percent of salaried workers' earned income and deduct withholding taxes, which is why workers say they carry "glass wallets."
However, high-income professionals and owner-operators generally report slightly more than half of their income, the BOK says. According to the NTS, the government writes off as losses up to 7 trillion won in revenue a year, as it fails to collect the taxes it imposes.
Some individuals with assets of several billion won do not even pay health insurance premiums for years, while enjoying all the benefits at the expense of poorer taxpayers. These "parasites" not only erode the government's fiscal health but disrupt social harmony by making other taxpayers feel the system has dealt with them unfairly.
Many wage earners have complained about what they see _ rightly _ as unequal taxation between earned income and unearned income, between earnings from labor and those from capital, as well as different income tax rates on employees and employers. If some of the wealthier class are allowed to evade even their disproportionately smaller taxes, it will bring about far more significant harm to society than lost revenue.
Recently, the tax authorities have raised controversy by putting real estate worth 400 million won up for public auction to collect 10 million won in back taxes. Many said the officials went too far. We beg to differ. Only such strong moves can re-establish our crumbled tax justice in this society filled with too many freeloaders.
