President Lee Jae Myung said on Monday that excess tax revenue from the semiconductor boom should fund long-term investments to raise growth potential. He also adopted a cautious stance on mandatory profit-sharing between companies and workers. The president made the remarks during a press conference marking his first year in office at Cheong Wa Dae in Seoul.
Lee stressed that excess tax revenue can swing sharply with economic cycles. Therefore, he argued, the government must deploy it for future generations and to strengthen national competitiveness. “It should be invested in a direction that raises South Korea’s growth potential,” Lee said. “That means discovering new growth engines like semiconductors.”
Moreover, he pointed out that the state could finance large-scale projects that private firms cannot tackle alone. However, he emphasized that such investments must align with the country’s long-term needs.
Meanwhile, Lee addressed growing calls for companies to distribute a set portion of operating profits as worker bonuses. He called the idea “highly controversial.” He noted that labor and management had resolved a recent dispute over Samsung Electronics’ profit-based bonus system. Yet the episode sparked a broader societal debate.
“There is the contribution of workers, the share of investors, the role of the state that invested heavily in research and development, and the contribution of the public that supported tax cuts during difficult times,” Lee said. “I thought a lot about whether this should be subject to labor disputes or whether it falls under management rights, but I have not reached a conclusion.”
Furthermore, Lee warned that moving too hastily on such a system could deter corporate investment. “If we do it first, companies could all leave,” he said, referencing basic income discussions in Silicon Valley. “Major foreign companies could also become reluctant to invest in Korea.”
In addition, he noted that corporate taxes are relatively predictable. However, forcing companies to share a fixed percentage of operating profits would create significant uncertainty. “It is a debate that could have a very serious impact on national industrial policy,” he said. “The debate itself must be handled very carefully.”
Lee added that the issue extends beyond domestic politics. It could affect the global trade order, and therefore may require international discussions. The president’s comments suggest the government will prioritize using excess tax revenue for strategic investments while treading carefully on profit-sharing mandates.
