Reform Party leader Lee Jun-seok criticized the government's overhaul of the individual savings account, or ISA, regime Thursday, calling it "a government-engineered all-in and government-engineered collusion."
The Ministry of Economy and Finance announced the tax reform package Monday, introducing changes to take effect next year. Under the plan, existing ISA holders will be barred from rolling over unused annual contribution limits, and account maturities will be capped at a maximum five-year extension. In their place, the ministry unveiled a "productive ISA" that exempts interest and dividend income from tax but prohibits investment in overseas ETFs.
Lee posted on his social media account Thursday, recalling that President Lee Jae Myung had reflected on his own past investment behavior in a 2021 broadcast. "President Lee Jae Myung once said on a program, 'I ended up doing short-term trades all day,' 'I lost the will to work,' and 'Looking back, it was truly insane,'" Lee Jun-seok wrote. "The very state the president described from his own experience is what the public feels every single day now."
He said the Kospi had climbed as high as 9,052 — a figure the government had touted as an achievement — before falling nearly one-third to the 6,000 level in just a month and a half in July. "This overhaul came out on Monday, right after that," he said.
Turning to the specifics of the tax reform, Lee said the changes would apply retroactively to the roughly 9.73 million existing ISA holders who have invested a combined 73 trillion won ($51.5 billion). He compared their situation to the myth of Sisyphus. "Sisyphus was condemned to push a boulder to the top of a mountain, only to watch it roll back down at the very threshold of the summit," he wrote. "The 9.73 million ISA holders are about to receive that same punishment."
"The compound interest they have pushed up over five years will roll back down at the line the government has drawn," he said. "Abolishing the carryover hurts the self-employed and young workers entering the workforce more than those with steady incomes."
Lee also criticized the broader direction of the government's financial policy. "Expanding the National Growth Fund to 200 trillion won and creating a K-sovereign wealth fund are part of the same trend," he said. "With the stock market — which has become a performance indicator for this administration — now shaking, the government is pushing citizens' retirement savings into the domestic market by every means available. This 'all-in' approach plants side effects on the public as well."
Lee warned that changing the rules without notice would cost the government public trust. "A government that rewrites the rules without warning loses credibility — even if it introduces a good policy next time, the public won't believe it," he said. He closed with a direct message to the president: "The stock market's performance is just one of many indicators by which an administration is judged. As President Lee Jae Myung himself once recalled, do not become obsessed."
jshan@heraldcorp.com
