It is about time for the Park Geun-hye administration to stop chasing its elusive goal of expanding welfare programs without tax increases. It is unfortunate for the country and possibly damning for future generations to continue to believe that people can enjoy greater welfare services without someone paying for it.
Park, whose election pledges included expanding welfare without increasing taxes, has kept to that position in spite of indications that it is simply not feasible. The latest figures show the country’s gross tax revenue in 2014 fell 10.9 trillion won short of the forecast 309.7 trillion won, the largest ever shortfall, as the slower-than-predicted growth rate affected the amount of revenue collected. It was the third consecutive year that tax earnings fell short of the target.
Already, Park has had to renege on her promise to provide a basic pension to all elderly people and settle for giving the monthly payments to 70 percent of them. Her promise to provide universal free child care has hit a wall, as the government has run out of money. It is about time that Park came straight out and admitted that her goal of expanding welfare programs without raising taxes is untenable.
For a while it appeared that the ruling Saenuri Party would press the administration to revisit the issue of “welfare without tax-hikes.” Party chairman Kim Moo-sung last week said that welfare increases were unrealistic without tax hikes and that it was wrong for politicians to mislead people with such pledges.
The newly elected Saenuri Party floor leader Yoo Seong-min also said that expanding welfare without tax hikes was not possible and that the people knew it, too. He took the matter a step further, saying that corporate taxes would be considered in any discussion of tax hikes.
Park, on Monday, seemed to hit back at the Saenuri Party leadership on the matter when she said that raising taxes would be an act of betrayal to the people, and that the focus should be on boosting the economy.
At Wednesday’s meeting with Park, Kim and Yoo said that they agreed with Park that the economic revival was a priority and promised the Saenuri Party’s support for the administration’s efforts to boost the economy.
This is a rather unfortunate turn of events. The two leaders who said that they would speak their mind to the Blue House appear to have acquiesced to the president on a matter they had been very vocal about only a few days before.
No one would dispute Park’s argument that the government should try to do all it can to revive the economy before raising taxes. The problem is that it is not clear just when the government’s efforts to stimulate the economy will bear results. What is certain is that it is unlikely to happen immediately.
A discussion on taxes and welfare programs should begin soon and the sooner the better. If money cannot be found for the welfare programs and the government is unwilling to raise taxes, then the programs should be adjusted: You can’t have your cake and eat it too ― at least not when there is a sluggish economy. It is high time politicians, including the president, faced the truth.
