The Korean government is taking more steps to help errant couples decide to make babies. This time, they are using the tax code (JoongAng):
In an effort to tackle the low birth rate, Korea’s Finance Ministry yesterday confirmed its 2007 tax rates.
Under the new policy, which took effect Wednesday, the monthly wage tax on a single person who earns 3 million won ($3,181) a month will increase 9.8 percent to 158,000 won a year if the salary remains unchanged.
Also, childless married couples with the same salary will see their taxes rise 5.2 percent to 144,000 won, while married couples with two children and the same salary will see their taxes dip 7.2 percent, to 92,000 won.
The tax burden declines by 25.2 percent to 63,000 won for married couples with three children, the ministry said
Two thoughts come to mind.
First, while some folks might be tempted to file this under “wacky Korea news,” the policy is little different than the tax breaks offered to parents in the US or the government subsidies offered for children in some European countries. The French are especially proud of the recent rise in their birth rate to 1.9 per woman (although none of the articles I have seen tell if the recent rise in births is coming from the native French or the North African colonists).
Second, financial incentives can help, but I think it will take a lot more than the current policy to have much of an influence. The simple fact is that, in a modern economic system, children are expensive. Also, Korea’s tax burden is so relatively low that tweaking it will do little to influence people’s baby-making plans. A better idea would be to figure out ways to reduce education costs, which are a serious burden for Korean parents.
8 Comments
The government will never be able to subsidize enough to make a major difference. The best solution is to lower the cost of living in Korea. This may be accomplished by more free trade agreements (lowering cost of consumables), more spending on education (reducing burden on parents), policies to increase the supply of reasonable housing in and around Seoul, and the election of a president that is focused on growth and development.
Sean Hayes
http://www.ahnse.blogspot.com
Under the new policy, which took effect Wednesday, the monthly wage tax on a single person who earns 3 million won ($3,181) a month will increase 9.8 percent to 158,000 won a year if the salary remains unchanged.
per month or year?
The French way is much better. Increase immigration and citizinship to migrants.
The French way is much better? In France, anyone who dares to criticize Islam generally receives multiple death threats.
Heck, you don’t even have to mention Islam: the openly gay mayor of Paris, Bertrand Delanoe, was stabbed in 2002 by a Muslim who just happened to hate homosexuals. The knife barely missed his heart.
I’m not knocking immigration, but France’s (until recently) low birth rate coupled with indiscriminate immigration are a great example of what not to do.
“although none of the articles I have seen tell if the recent rise in births is coming from the native French or the North African colonists”
Try French newspapers. The rise is coming from both. Not only “colonists”.
And one of the reasons for that rise is that, basically, the French education system is free, university included.
[blockquote] “although none of the articles I have seen tell if the recent rise in births is coming from the native French or the North African colonists”
Try French newspapers. The rise is coming from both. Not only “colonists”.
[blockquote]
The chances are likely that it is coming disproportionately more from the North Africans. In a welfare society such as France, unfortunately, people in the lower socio-economic group tend to produce far more babies than those from the middle class.
Give Islam a chance. I’m sure they mean well.
Time to back pedal a bit on the French statement:
With the French limits on immigration, they are not as demographically doomed as I had previously thought.
Back to Korea, I am not a big fan of massive immigration here. This peninsula is the only place on Earth reserved for Koreans. If, after a few generations, Korea becomes another “melting pot” (or mosaic or salad bowl) multi-ethnic nation, I think the world will be a poorer place.