"Unrealized Gains from Stocks and Real Estate Should Be Taxed as Income: Call for Comprehensive Taxation"

Arguments have been raised that unrealized gains from investments, such as real estate and stocks, should be considered income and subject to comprehensive taxation.

On the morning of Tuesday, June 23, National Assembly members Kim Young-hwan of the Democratic Party of Korea, Yoon Jong-o of the Progressive Party, Cha Gyu-keun of the Rebuilding Korea Party, and Han Chang-min of the Social Democratic Party, along with civic groups including People's Solidarity for Participatory Democracy, the Federation of Korean Trade Unions, and the Korean Confederation of Trade Unions, held a forum at the National Assembly Members' Office Building in Yeouido. The forum was titled "Addressing Gaps in Asset Income Taxation and Exploring a Shift Toward Comprehensive Income Taxation."

The discussion focused on shifting the system toward "comprehensive income taxation," which taxes based on economic capacity rather than the form of income.

The argument is that taxation should be based on the actual increase in net assets and economic capacity, regardless of whether the assets have been sold or what form they take.

Lee Sang-min, a senior research fellow at the Nara Institute for Economic Policy, pointed out, "If taxation only occurs at the time of realization, taxpayers have an incentive to avoid selling assets to evade or delay taxes, leading to a 'lock-in effect.' This prevents capital from moving to more efficient areas."

However, he noted that this does not mean unrealized gains must always be taxed immediately. As an alternative, he suggested recognizing unrealized gains as income in principle, while allowing for the deferral of tax payments until the time of sale, potentially with interest added.

Additionally, it was proposed that for assets where market prices are difficult to determine, such as real estate or unlisted stocks, the current system of taxing at the time of realization could be maintained, or new taxation methods could be introduced exclusively for high-net-worth individuals or specific financial assets.

Calls for stricter taxation on high-income capital earners were also made.

Park Gi-san, a director at the Federation of Korean Trade Unions, stated, "We need to revive the financial investment income tax, reduce tax exemptions and deductions concentrated on high-income earners, and add new nominal tax brackets to increase the effective tax rate for the ultra-high-income bracket."
※ Please note: This article was translated by AI and may contain errors.