Cho began by praising the tax policy of 15th century Korean monarch King Sejong the Great.
Sejong boosted agricultural production to fill the bellies of his subjects. He then enacted a fair, well-planned tax aimed at strengthening the state. Based on scientific methods, Sejong’s tax code took 25 years to write, and involved listening to expert opinion and public opinion polls.
Cho contrasted Sejong’s tax policy with that of the current Korean administration, accusing the government of seeking to use confiscatory taxes to punish economic activities it does not like.
Seoul’s controversial real estate policies are a leading example of this, she writes, but so is the planned tax on digital assets.
The tax treats digital asset investors as “potential criminals” in need of “education,” she says.
In fact, the government is blowing a major opportunity to cultivate a market and grow its tax base.
If the government were to enact policies to draw foreign blockchain companies to Korea while helping local blockchain startups to receive overseas investment or expand globally, the fruits of that support would naturally translate into increased tax revenues.
Instead, Cho writes, the government declared the issuing of digital assets as illegal with no clear legal grounds to do so, forcing promising startups overseas. These startups are now paying taxes in places like Singapore and Switzerland rather than Korea.
The Korean government has also banned overseas investors from investing in local digital asset exchanges.
And now they’re taxing digital assets with neither the proper infrastructure to do so nor the support of lawmakers or markets.
Cho says the government failed to develop Korea’s national interest despite spending five years pushing so-called “Fourth Industrial Revolution” projects.
If the grand project of cultivating new technologies to enrich the people and bolster national competitiveness is to work, the government needs to adopt a spirit of “love for the people,” of wanting them to live well.
This requires the government to draw a clear line between speculation and investment and to craft fair, reasonable tax policies based on research, education and market performance of potential growth sectors.