GNP poised to thwart planned tax cut for the rich, corporations

By Kim Eun-jung
SEOUL, June 16 (Yonhap) -- The ruling Grand National Party (GNP) will push for scrapping a planned tax cut for the rich and corporations in the parliamentary session beginning in September, party officials said Thursday, a move likely to spark clashes with the Lee Myung-bak administration over its major economic policy.
It is the latest in a series of welfare policies led by the conservative party to win voters ahead of parliamentary and presidential elections next year, as it is still reeling from April by-election defeats.
The tax cuts on businesses and high-earning individual income, Lee's major economic stimulate package, are set to be implemented next year, but the proposed measure has faced negative reviews that suspect it will increase financial burdens on the middle class.
In Thursday's policy coordination meeting, GNP legislators agreed on the need to withdraw or revise the plan so as to expand benefits for the needy, such as college students or low-income families, though their views differed on how to craft alternatives, spokeswoman Lee Doo-ah said.
The GNP's policymakers will draft supplementary measures reflecting opinions of the majority before officially adopting them in the upcoming session, she added.
In a survey conducted on GNP legislators on Wednesday, 78.4 percent of 97 respondents objected to the income tax cut while 65.7 percent opposed the corporate tax. The GNP controls 171 seats at the 299-seat parliament.
Although Lee is unlikely to ditch his economic reforms during the last stage of his single five-year term, bipartisan support is expected for repealing the cut in the parliament as opposition parties have objected the additional reduction since it was announced.
Meanwhile, Finance Minister Bahk Jae-wan expressed his opposition to the legislature's drive to tackle the tax cut plan.
"Income and corporate taxes have a big impact on jobs," the former labor minister said at a meeting with reporters. "If (the GNP) confirms its stance, (the government) will consult with the party how to handle (tax cut measures) in the parliamentary session."
ejkim@yna.co.kr