Lee Jae-myung, the Democratic Party of Korea presidential candidate, announced plans to introduce a family coefficient system that takes into account spousal income and family size into the income tax system. The aim is to alleviate the income tax burden on multi-child households to address the low birth rate issue.

Lee Jae-myung, the Democratic Party of Korea’s presidential candidate, is raising his fist in celebration after finishing a speech at the launching ceremony of the 21st Presidential Election Central Election Countermeasure Committee held at the National Assembly members' hall in Yeouido, Seoul, on Oct. 30. /Courtesy of News1

The candidate noted on Facebook on the 30th, “France has implemented an income tax system that considers both spousal income and family size as a solution to overcome low birth rates. We will also review changing our income tax system to a more family-friendly approach in the medium to long term.”

The introduction of the family coefficient system was discussed by the Salary Defense Corps, a special committee of the Democratic Party. The family coefficient system was established by France to increase birth rates. The family coefficient increases with the number of family members, and the parents' income is divided by the family coefficient, with tax rates ranging from a minimum of 0% to a maximum of 45% applied based on the taxable income range. The more family members there are, the smaller the per capita taxable income becomes, resulting in lower tax rates.

The Democratic Party has been discussing plans to reform the income tax system centered around the Salary Defense Corps. The Salary Defense Corps announced a proposal to increase the basic income tax deduction from 1.5 million won to 1.8 million won. It is also reviewing an ‘income tax inflation linkage system’ that adjusts the deduction amount according to inflation rates.