• KDI Journal of Economic Policy
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• v.12 no.2
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• pp.135-149
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• 1990

Housing owners in Korea have a variety of tax advantages such as income tax exemption for the imputed rent of owner-occupied housing, exemption from the capital gains tax and deduction of the estate tax for one-house households. These tax reliefs for housing owners not only conflict with the principle of horizontal and vertical equity, but also lead to resource misallocation by distorting the housing market, and thus bring about regressive distribution effects. Particularly in the case of Korea with its imperfect capital market, these measures exacerbate the inter-class inequality of housing ownership as well as inequalities in wealth, by causing the affluent to demand needlessly large housing, while the poor and young experience difficulties in purchasing residential properties. Therefore, the Korean tax system must be altered as follows in order to disadvantage owner-occupiers, especially those owners of luxury housing. These alterations will promote housing-ownership, tax burden equity, efficiency of resource allocation, as well as the desirable distribution of income. First, income tax deductions for the rent payments of tenants are recommended. Ideally, the way of recovering the fiscal equivalence between the owner-occupiers and tenants is to levy an income tax on the former's imputed rents, and if necessary to give them tax credits. This, however, would be very difficult from a practical viewpoint, because the general public may perceive the concept of "imputed rent" as cumbersome. Computing the imputed rent also entails administrative costs, rendering quite reasonable, the continued exemption of imputed rent from taxation with the simultaneous deduction in the income tax for tenants. This would further enhance the administrative efficiency of income tax collection by easing assessment of the landlord's income. Second, a capital gains tax should be levied on the one-house household, except with the postponement of payments in the case that the seller purchases higher priced property. Exemption of the capital gains tax for the one-house household favors those who have more expensive housing, providing an incentive to the rich to hold even larger residences, and to the constructors to build more luxurious housing to meet the demand. So it is not desirable to sustain the current one-house household exemption while merely supplementing it with fastidious measures. Rather, the rule must be abolished completely with the concurrent reform of the deduction system and lowering of the tax rate, measures which the author believes will help optimize the capital gains tax incidence. Finally, discontinuation of the housing exemption for the heir is suggested. Consequent increases in the tax burden of the middle class could be mitigated by a reduction in the rate. This applies to the following specific exemptions as well, namely, for farm lands, meadows, woods, business fields-to foster horizontal equity, while denying speculation on land that leads to a loss in allocative efficiency. Moreover, imperfections in the Korean capital market have disallowed the provision of long term credit for housing seekers. Remedying these problems is essential to the promotion of greater housing ownership by the low and middle income classes. It is also certain that a government subsidy be focused on the poorest of the poor who cannot afford even to think of owning a housing.

• The Southeast Asian review
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• v.28 no.1
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• pp.21-51
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• 2018

This article takes several approaches in explaining recent developments in Vietnam. First, it draws upon an array of sources that idealize Vietnam's embrace of capitalism and integration into the global market in order to sketch out its economy's progress in 2017. Second, it observes, evaluates, and diagnoses recent changes in the Vietnamese economy in the medium to long term by incorporating conflicting perspectives on Vietnam's performance as a capitalist country. Third, this article traces the power shifts that have risen from internal struggles in the Communist Party over political and social issues. Fourth, it elaborates on the aforementioned impact that foreign relations have had on socio-political developments in Vietnam, as well as the government's response. In so doing, it also attempts to evaluate, however briefly, the significance of the 25th anniversary of South Korea-Vietnam relations. Finally, it examines the public's reaction to the post-reform transitions in light of recent sociocultural changes. 2017 was a memorable year for Vietnam: a continuous march toward capitalism; the resulting expansion of the Vietnamese people's demands; political controversies and government control; the looming instability of United States-China relations and various attempts to address the situation. These events will inevitably replicate themselves in the future as the ostensibly socialist Vietnam adopts a capitalist model. The problem is that it is unclear whether these experiences will continue with the consent of the people of socialist Vietnam or engender resistance. It is difficult to achieve meaningful consent in the status quo of worsening inequalities, widespread corruption, monopoly on power, and sustained use of unskilled low-wage workers. In other words, when concerns such as welfare, public health, and the environment are set aside in favor of economic development and commercialization as they have been, discontent, rather than consent, will prevail. It is thus important to keep a watchful eye on the viability of the nominal economic growth, surface-level political stability, and strategic responses to foreign relations that took place in 2017.

• Korean Journal of Social Welfare Studies
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• v.42 no.1
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• pp.333-370
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• 2011

This study views the aged inequalities according to the inequality hypothesis of the life course perspective in OECD 10 countries. Focusing on educational level which is early social status and welfare state regime which is social structure factors of inequality, this study analyzes income inequality for the aged who have transformed into old age period from non-aged period. The analysis is based on the data SHARE of Europe and HRS of USA. The main results of this study are summarized in four points. First, the income inequality is quite high by welfare system and the educational level. Second, the income inequality is somewhat reduced in case the people move from the period of non-aged to the period of aged. However, gini coefficient is still high(0.475). Considering welfare state regimes, although the income inequality is high in conservative regime of non-aged period, this would be higher in aged period. This result supports cumulative advantages/disadvantages hypothesis. The liberal regime remains high income inequality which supports the theoretical argument of status maintenance. Social democratic regime provides evidence to offer some support for the status leveling hypothesis. In there, income inequality is lower in aged period even though income inequality of non-aged period is low. Third, the cumulative advantages/disadvantages of disposable income according to educational level are strengthened and heterogeneity is grown in case people transition from the late period of non-aged to aged period. But public pension has been more equally distributed than gross income. Fourth, seeing welfare state regimes, public pension of aged-period is more inequally distributed than that of non-aged period in liberal and conservative regime. Specially in conservative regime, inequality of gross income is very high and public pension is also inequally distribute So this might show that the social security system strengthens the cumulative advantages/disadvantages. However, in the social democratic regime, public pension is more equally distributed than gross income and it could be much more equally distributed in aged period, which can support the status leveling hypothesis.