Some of the richest people in South Korea may be among the biggest losers from elections last week that all but ended a proposal to cut one of the highest inheritance tax rates in the developed world.
President Yoon Suk-yeol had been looking to reduce the levy, a move that requires parliamentary approval, but his conservative People Power Party suffered a stinging blow in the vote that saw it lose seats in the body. Meanwhile, the main opposition bloc increased the size of its majority and is looking to have wealthy individuals and sprawling conglomerates — known as chaebol in the country — pay more in taxes.
South Korea’s regular maximum inheritance levy of as much as 50% is the second-highest among members of the Organisation for Economic Co-operation and Development, after 55% in Japan, and can go as high as 60% in the case of inheritance from a person listed as the top shareholder. The rate is meant to prevent families, such as those behind the chaebol that dominate the corporate landscape, from passing down the bulk of their fortunes and maintaining what critics contend is a disproportionate influence over the economy.