Plans by opposition politicians in South Korea to introduce a new tax on family-controlled conglomerates have been criticised by the country’s finance minister.
Bahk Jae-wan said the Democratic United Party’s suggestion to tax the dividends earned by family-owned conglomerates, or chaebol, from equity investments in their affiliates could hurt future investment and competitiveness, reported the Yonhap News Agency, a local news provider.
However, the Democratic United Party said the tax, which was suggested over the weekend, would prevent congregates from controlling wealth and reduce the risk of reckless expansion. Its proposals are partly inspired by Warren Buffett’s tax the rich idea and the global protests against the wealthy 1%.
South Korea is home to a number of large family-controlled conglomerates, including Samsung and Hyundai. Their wealth has come under increased scrutiny ahead of the country's April general elections because of the large financial gap between rich and poor. In 2008, this gap was the third largest out of all countries in the Organisation for Economic Cooperation and Development.
But, according to the Yonhap News Agency, Bahk said too many regulations on businesses could hamper corporate activity, hurting the country’s economy in the process.
"The corporate bashing by political parties could be understood as a reaction to the polarisation underway in the world but we still should stay away from excessive denouncing of those who have money and power," he told journalists.