The current taxation policy on household electricity in South Korea became an issue over the summer. Just like any progressive tax system, with this policy implemented, the tax rate increases when the person spends more. It is a fair system because it grants financial margin for low income population in exchange for a little more burden for the upper middle class.
Also, it creates an incentive for people to save more energy, which comes from resources that Koreans usually cannot internalize. In fact, when the policy was first introduced in South Korea back in 1973, President Park advocated for this policy for the exact same reason. Due to the 1973 Oil Crisis (the global oil price rose due to turmoil in the Middle East), there was a desperate need for moderation in electricity output then. Over time, the system evolved through renewals in Korean Congress every time the new administration was elected. However, the people are not so happy about it at this moment.
As the graph describes, the electricity bill increases every 100 kilowatt. The second hour of air conditioning costs 2.1 times more than the first and for the sixth hour, the number goes up as high as 11.7. The minimum fee would make the electricity bill in South Korea one of the cheapest in the world, but the level 6 fee makes it as twice as expensive compared to that of other countries.
The heat wave of 2016 was quite unprecedented in South Korea. This led to a steeper demand for air conditioning in every household. This made more households to be prone to costly electricity bill. Every media outlet including social networks and portal sites was rushed with complaints on the unreasonable tax policy. Meanwhile, the government claims (2) that raising the minimum fee to balance out the system would ultimately benefit the high income population. This might be true. For example, Chairman Lee of Samsung paid 24,000,000 won (approximately 22 thousand dollars) in one month. The elimination of the current system might reduce this number by half.
Nevertheless, the advocates for reform claim injustice in burdening the working class people with weighty energy tax in the midst of radical climate change. As the electricity bill for July started to arrive, hundreds of people on the internet and social media reported on how their bill rose from 80,000 won to 520,000 won just from using twice as much air conditioning due to the progressive billing.
In the end, the politicians did respond. Quite a few congressmen announced that they are working towards a new legislation to take down the current model (1).
Yet, the summer is already coming to an end and the legislation is not developed any further than a future tense. Even when the lack of attention created a national outcry, a tardy reaction is all people get. Get a grip, Congress!
-Paul Jeon (’17)
Featured Image: http://inuri.soaworld.com/