Trends in Tax Law: Tracing the History of Tax Proposals over the Last 20 Years
June 22, 2017
Revenue Estimates Division I
The role of taxation has evolved in line with the needs of the periodical and societal conditions. Public finance has assumed increasingly greater importance as the Korean economy has grown, and tax policy has performed a wide range of functions, including promoting economic growth and improving income redistribution, beyond simply serving as means to raise public funds. The purpose of this report is to shed light on how tax policy in Korea has changed and suggest implications for desirable changes in the role of tax policy in the future. The report is meaningful in that it is the first attempt by the National Assembly to analyze tax proposals introduced by lawmakers in a structured and comprehensive manner. To that end, the report offers findings of analysis made from various perspectives based on data on the tax bills introduced by lawmakers over the last 20 years.
The report provides analysis of periodical characteristics of tax laws through data visualization including changes in policy goals, policy targets, and key words. It also focuses its analysis on how the role of the National Assembly has changed in the process of amendment of tax laws, the key characteristics of basic economic conditions under which taxes are increased or decreased, and how tax policy has changed since the global financial crisis.
The key periodical characteristics of tax policy can be summed up as follows:
- The primary goal of tax policy is to reduce the polarization of wealth after the 19th National Assembly (2012 to 2016).
- Because the policy goal is shifted to narrowing the gaps, the focal point of the policy target is clearly shifted from individuals and entire businesses to a specific target group (high-income earners and large companies or small- and mid-sized enterprises (SMEs)).
- Key words of tax policy include equity, SMEs, and employment after the 19th National Assembly (2012 to 2016)
- Because the policy target has shifted to large companies and high-income earners after the 19th National Assembly (2012 to 2016), a higher percentage of bills calls for tax increases.