PPP slams 2026 tax reform as 'worst ever,' vows to fight to the end

The People Power Party on Monday sharply criticized the government's newly unveiled 2026 tax reform package — which includes an overhaul of the comprehensive real estate holding tax — calling it "the worst tax reform in history" that "collects more, gives less and merely puts on a show."

Members of the PPP's National Assembly Finance and Economy Committee held an emergency press conference that afternoon, saying the government had only added to the burden on people already struggling under high inflation, a weak won and elevated interest rates. "The government is raking in a record surplus in tax revenue thanks to a semiconductor boom, yet it still wants to squeeze out an additional 3.4 trillion won ($2.37 billion) in taxpayers' money — in a word, 'shut up and pay,'" they said.

The lawmakers said the Lee Jae Myung administration's "extortionate tax overhaul" would upend long-standing principles of taxation all at once and bring "great disaster to people's lives." They called it "an arrogant style of governance that undermines citizens' property rights and the rule of law in taxation," and "bad politics aimed at stripping people of their statutory tax benefits and replacing them with government handouts."

On real estate tax changes, they argued the government had raised both property holding taxes and transaction taxes simultaneously. "Ultimately this will trap people — unable to buy or sell — and only reduce supply," they said, adding that the higher tax burden would be passed on to tenants, driving up jeonse and monthly rent prices. They said Korea Real Estate Board statistics from the Moon Jae-in administration bore this out.

The lawmakers also took aim at the shift in tax deduction eligibility for both the comprehensive real estate holding tax and capital gains tax — moving the qualifying condition from ownership to residency. "Citizens must personally prove they meet the stringent requirements to have non-residency periods recognized as residency periods. This effectively suppresses even the freedom of movement for single-home owners," they said. They added that the holding tax would be raised through multiple mechanisms, including an increase in the fair market value ratio and a new cap on tax deductions, while the capital gains tax deduction would be cut in half through a newly introduced ceiling.

They also criticized provisions offering temporary capital gains tax reductions or relief periods for long-term holders, the elderly and multi-home owners under the guise of giving them a "chance to sell." "This sounds like coercion — sell your home and get out if you can't afford the taxes," they said. Tighter regulations on rental business operators, they added, would shrink the rental supply and make life harder for those without homes, young people and newlyweds.

The PPP finance committee members said the reform package "largely eliminated or redirected to fiscal spending the statutory tax benefits that exist to support people's livelihoods." They questioned whether it was appropriate policy for the world's lowest-fertility nation to abolish tax credits for childbirth, adoption and marriage and replace them with direct fiscal support.

On the family business inheritance deduction, they criticized the extension of the required holding period for the deceased from 10 years to 30 years. "In a rapidly changing era, the heir must also run the same business for more than 10 years — isn't the intent ultimately to render the system useless?" they said. While the reform introduced new tax incentives for third-party business succession, they said the core problems — a top inheritance tax rate of 50 percent, a premium valuation for controlling shareholders and the estate tax method — remained untouched.

They also said newly created support measures were hard to understand, describing many as appearing to serve the administration's specific political agenda. These included a "domestic production tax credit" that funneled benefits to solar and wind power, and a new "productive finance ISA" designed to channel investment into domestic shares and equity funds — moves they characterized as an attempt to prop up the stock market.

"The public is aghast at a tax reform that hangs a sheep's head while selling dog meat," the lawmakers said. "If a five-year administration reshapes the tax system for political ends and uses taxes to dictate the choices people make in their own lives, who can plan for the future?" They warned the government not to underestimate public and market anger over the hastily drawn reform. "No government beats the market, and no government beats the people," they said.

They added that the Lee Jae Myung government's "patchwork of harmful changes" would require amendments to more than 11 laws and 115 tax expenditure items. "The PPP will fight to the end to protect the rights and property of the people against this tax-obsessed governance," they said.