In a recent YouTube short, Lee Jeong-hwan of News Tomato and Lee Sang-min, senior research fellow at the National Assembly Budget Research Institute, discussed the possibility of tax hikes following local elections.
Lee Sang-min argued that the central government sets spending levels politically—deciding whether to spend 700 trillion or 800 trillion won—before determining revenue. He stressed that while necessary expenditures should be made, unnecessary spending must be cut, and at a minimum, tax cuts should be avoided.
When asked whether the current administration under President Lee Jae-myung might reverse some tax cuts, Lee Sang-min noted that the president himself has hinted at tax increases. He predicted appropriate tax hikes after the elections.
Lee Sang-min introduced the concept of the 'fiscal trilemma': a triple contradiction where higher spending, lower taxes, and lower debt cannot all be achieved simultaneously. If the government wants to ramp up spending on R&D and AI, it must either increase debt or raise taxes. He argued that raising taxes is a more responsible approach than increasing national debt.