Largest-ever inheritance-tax bill in South Korean history . . .
On Wednesday, Samsung Group’s heirs announced that they will be paying more than C$13.3 billion in taxes for their inheritance from the late chairman, Lee Kun-hee, who passed away in October. The heirs also revealed their plan to donate C$1.1 billion to improving public health care and supporting research on rare childhood diseases, as well as approximately 23,000 pieces of art from Chairman Lee’s collection, which includes works by Picasso, Monet, and Chagall and is valued at about C$2.2 billion. The family plans to pay the full inheritance tax over the next five years, funded by stock dividends and bank loans.
Lee’s legacy and Samsung’s significance for Koreans . . .
Lee, who was South Korea's richest man, left behind more than C$24.4 billion worth of assets, including a C$21.1-billion stock portfolio. Under Lee, Samsung Group’s sales grew from C$11.1 billion to C$428 billion, and revenue jumped from C$222 million to C$80 billion between 1987 and 2018. Large family-run conglomerates, known in South Korea as chaebols, have played a key role in leading the country’s rapid economic growth. At the same time, their influence in the domestic economy, politics, and society has increasingly drawn public criticism. The astronomical amount of taxes Lee’s heirs will be paying has sparked debates over not only the tax rate but also the chaebol system itself, especially against the backdrop of an increasingly unequal South Korean society.
Towards taxing the ultra-rich?
Globally, discontent over the growing gap between the rich and the poor has become increasingly evident through the pandemic. U.S. President Joe Biden is reportedly preparing a tax hike for the wealthiest Americans. In this context, Lee’s astronomical inheritance taxes are drawing attention. South Korea has one of the highest rates of inheritance tax in the world, with estates taxed at 50 per cent when they exceed C$3.3 million and another 20 per cent for the largest shareholder of a private company. The average rate across OECD countries is about 15 per cent, according to the Tax Foundation based in Washington, D.C.