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The National Assembly Futures Institute publishes reports that predict and analyze the changes in the future environment based on a comprehensive perspective, and derive mid- to long-term national development strategies in consideration of the preferences of the citizens
[20-36] Economic Inequality and Tasks of Tax Policy Focusing on Recurrent Taxes on Immovable Property

Date : 2020-12-31 item : Research Report 20-36 P.I : Lee Sun-hwa et al.

[20-36] Economic Inequality and Tasks of Tax Policy Focusing on Recurrent Taxes on Immovable Property

 Together with income inequality, asset inequality has emerged as a major pillar of economic inequality in a majority of countries around the world. Various attempts are being made to supplement existing income taxes through asset taxation as a new type of economic inequality unfolds, but a consensus on the direction of such taxation has not yet been reached, conceptually or institutionally.

 In Korea, the level of asset inequality is not as severe as in other advanced countries, but the pace of its progress is gradually increasing.

 As real estate accounts for 75% of all types of privately owned assets in Korea, the country‘s asset inequality is largely attributable to real estate ownership inequality. Real estate has been a major cause of worsening asset inequality and class mobility in the household sector, as too much liquidity has been concentrated in the real estate market and the resulting price increase has raised preferences for household investment.

 This study analyzed the current status of inequality in Korea, focusing on real estate assets, and examined the role and function of recurrent taxes on immovable property as a policy measure to correct this. It takes into account the fact that asset inequality has developed around real estate in Korea, and that the comprehensive real estate tax is being used as a policy measure to stabilize the real estate sector and alleviate the concentration of assets. Finally, this study aims to present a mid-to-long-term reform plan for recurrent taxes on immovable property as asset taxes to mitigate inequality.