South Korean Leader Proposes a Tax to Finance Reunification
SEOUL, South Korea - President Lee Myung-bak of South Korea proposed a special tax on Sunday to finance the enormous cost of reuniting with North Korea, as concerns have deepened here over the North’s future after the eventual death of its ailing leader.
The proposal broached a delicate issue, and analysts said it could provoke an angry response from the North, which may see it as an aggressive move by the South.
Although all previous South Korean leaders have advocated rejoining the North, Mr. Lee was the first to propose that the South start saving for the event with a unification tax.
Merging the South’s economic powerhouse with the North’s impoverished socialist system could impose huge costs on South Korea, analysts say. Those costs have been estimated at a few hundred billion dollars to $1 trillion, according to various South Korean and American research institutes, depending largely on how quickly the countries were integrated.
“Reunification will definitely come,” Mr. Lee said Sunday in a speech marking the 65th anniversary of the Koreans’ liberation from 35 years of Japanese colonial rule. “I believe that the time has come to start discussing realistic policies to prepare for that day, such as a reunification tax.”
Mr. Lee did not elaborate on what prompted his proposal. But it came as officials and analysts in Seoul contemplated the possibility that the North’s leader, Kim Jong-il, could die before a successor gained firm control.
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The proposal broached a delicate issue, and analysts said it could provoke an angry response from the North, which may see it as an aggressive move by the South.
Although all previous South Korean leaders have advocated rejoining the North, Mr. Lee was the first to propose that the South start saving for the event with a unification tax.
Merging the South’s economic powerhouse with the North’s impoverished socialist system could impose huge costs on South Korea, analysts say. Those costs have been estimated at a few hundred billion dollars to $1 trillion, according to various South Korean and American research institutes, depending largely on how quickly the countries were integrated.
“Reunification will definitely come,” Mr. Lee said Sunday in a speech marking the 65th anniversary of the Koreans’ liberation from 35 years of Japanese colonial rule. “I believe that the time has come to start discussing realistic policies to prepare for that day, such as a reunification tax.”
Mr. Lee did not elaborate on what prompted his proposal. But it came as officials and analysts in Seoul contemplated the possibility that the North’s leader, Kim Jong-il, could die before a successor gained firm control.
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NY Times has the entire article