Tax, pension, insurance payments hit all-time high under Moon administration

[Image source: Pixabay]

The burden of tax, public pension, and the four major social insurance payments increased dramatically under South Korea’s Moon Jae-in administration. The public payment ratio, measured by dividing the total amount of public payments by the nominal gross domestic product (GDP), topped 30 percent for the first time and the national debt also surpassed 110 trillion won ($817.84), the largest in history. Critics say the burden has been passed on to the public due to the expansionary fiscal policy under the previous Moon administration.

According to data of the National Assembly submitted by the National Assembly Budget Office on Thursday, the public payment rate stood at 32 percent at the end of 2022 and the tax payment rate at 23.8 percent, both of which are record highs. The public payment rate is the sum of national and local taxes, public pensions including the national pension, and the four major insurance payments divided by nominal GDP, while the tax payment rate only factors in national and local taxes.

The public payment rate has risen to 32 percent in 2022 from 26.7 percent in 2018 under the Moon administration, a 5.3 percentage point jump in five years. The tax payment rate also increased by 3.9 percentage points to 23.8 percent from 19.9 percent as the tax burden and social security contributions, which includes public pension and four major insurance payments, surged by 36.1 percent and 37.2 percent respectively, while nominal GDP increased by 13.9 percent during the five years of the Moon administration.