Nearly half of South Korea's economists urge repeal of inheritance tax

Nearly half of South Korea's economists want the inheritance tax abolished, according to a survey.

The Korea Economic Association on Thursday released the results of a survey conducted in September and last month on their members. When if they agreed with a repeal of taxes on inheritance and gifts and imposition of a capital gains tax on the disposal of assets, 47% said "Yes." 

The opinion is that because an heir has paid income tax in the preparation of an inherited asset, he or she should pay only the transfer tax on the profits if the asset is later sold, but 35% disagreed with this.

The majority favored lowering the nation's highest inheritance and gift tax rates of 50% to under the highest rate income tax of 45%. Thirty-two percent said the two highest rates should be the same and 26% wanted a further bump in the highest income tax rate, with both groups accounting for 58%. Thirty-five percent urged further hikes in the highest inheritance and gift tax rates.

The majority 62% disagreed with raising the tax rates for inheritance and gifts in the interest of income redistribution, with only 12% agreeing.

Many opinions favored expanded tax breaks especially for business assets to create jobs and boost investment incentives, with 61% urging more deductions for inheritance of a family business or farm and the abolition of the premium tax on the largest shareholder. Twenty-four percent opposed these measures.

On a proposed revision of the inheritance tax to contain the same beneficiary standards as those of the gift tax like how the estate acquisition tax is levied on each heir of an inherited asset, 71% agreed and only 6% disagreed.

Write to Do-Won Lim at van7691@hankyung.com