15.1 C
New York
Tuesday, November 12, 2024

Giving 1.4 billion won to 25-year-olds: Piketty’s “minimum inheritance tax” proposal.

I will read the article for you. A professor in Paris, Thomas Piketty, who is an economist and one of the world’s leading researchers on inequality, proposed a “minimum inheritance tax” during an international academic conference on inequality and social policy hosted by Yonsei University’s Korean Inequality Lab. This concept aims to distribute 60% of the average net assets of all adults in a country to every adult of a certain age.

Piketty made this proposal because even in advanced countries, asset inequality remains severe. For example, in France, the bottom 50% of individuals hold only 6% of the total net assets, while the top 10% own over 50%. He believes that implementing a minimum inheritance tax could lead to greater economic mobility and equal opportunity by providing individuals with the means to start businesses or buy homes.

If this minimum inheritance tax were implemented in South Korea, each adult over 25 could receive approximately 140 million won, based on the average household net assets. Piketty argues that without such a measure, long-term substantial changes in wealth distribution are unlikely to occur.

By adopting Piketty’s proposed minimum inheritance tax in Western Europe, the share of net assets held by the bottom 50% of individuals could increase from around 5% to the mid-30s. Meanwhile, the share held by the top 10% would decrease significantly.

Piketty also suggests a universal inheritance system, where individuals who do not inherit anything would receive a certain amount, emphasizing the need for continued investment in welfare states, education, and the gradual implementation of wealth redistribution measures.

The minimum inheritance tax proposal is supported by a detailed funding plan, which includes strengthening progressive taxes like property and inheritance taxes to cover the costs. Piketty estimates that the required funding level for this system is comparable to public education expenditures in major developed countries.

This proposal is rooted in Piketty’s philosophy of justice, as he believes that asset inequality leads to significant disparities in life opportunities. By reducing the tax burden on the wealthy through income and inheritance taxes, the current government in South Korea is moving in the opposite direction of Piketty’s proposal, ultimately exacerbating asset inequality.

Ryu Yigeun, Senior Researcher at the Hankyoreh Economic and Social Research Institute

Related Articles

Latest Articles