Seoul: Swiss voters on Sunday decisively rejected a proposition that would have introduced a high inheritance and gift tax on the super-rich. The youth wing of the Social Democrats had proposed the "Initiative for the Future," which aimed to impose a 50 percent inheritance and gift tax on estates valued over 50 million Swiss francs ($62.1 million). The initiative intended to use the tax revenue to fund climate-related policies and address wealth inequality. However, 78.3 percent of the electorate voted against the proposal, fearing it could drive wealthy individuals and companies out of the country, potentially harming the economy and reducing overall tax revenue. All of Switzerland's cantons rejected the initiative, reinforcing the country's reputation for economic stability and its current tax system, which has no federal inheritance tax.

According to Yonhap News Agency, the situation in South Korea presents a stark contrast. The very 50 percent inheritance tax, which Swiss voters rejected, is imposed in Korea on assets whose final taxable amount exceeds 3 billion won. Considering that the median value of Seoul apartments is more than 1 billion won ($681 million), the rate appears excessive. Furthermore, Korea's inheritance tax ceiling, which is the second-highest among the 38 members of the Organization for Economic Cooperation and Development, rises to 60 percent for major shareholders of large companies bequeathing their properties. This rate is effectively the highest in the world.

Even chairpersons of Korean global corporations are concerned about securing the funds to pay their enormous inheritance tax bills, which often reach trillions of won. Despite this, inheritance tax reform has stagnated in Korea, confined to an ideology of equality. President Lee Jae Myung, at a press conference marking 100 days in office, called for increasing inheritance tax deductions. He highlighted cases where families are forced to sell their homes to pay inheritance taxes, describing the tax as "too cruel." He proposed raising the deduction limit from the current 1 billion won, which has been unchanged for 28 years, to 1.8 billion won, effectively exempting property valued up to 1.8 billion won from inheritance tax. However, the ruling party has stalled Lee's initiative, with the Strategy and Finance Committee of the National Assembly considering the proposal a long-term issue.

Inheritance tax is not merely a personal finance issue; it impacts the national economy, affecting family business succession, capital accumulation, facility investments, and job creation. Heavy inheritance taxes tend to drive the wealthy and their capital out of the country. According to the 2025 wealth migration report by Henley and Partners, a UK-based global consultancy, 2,400 affluent Koreans with more than $1 million in liquid investment assets are estimated to have emigrated this year. This number is expected to be the fourth-largest globally, behind the UK, China, and India, and is six times higher than three years ago. Major reasons include the inheritance tax burden and an antibusiness atmosphere. In some cases, Korean children cannot take over their family enterprises due to the inheritance tax burden.

If South Korea continues to go against the global trend of attracting capital and talent through business-friendly policies, including lower taxes, its national competitiveness may weaken. It is time to adjust inheritance tax rates to an internationally competitive level. Growth is the ultimate solution to economic and social problems, as a growing economy leads to increased jobs, incomes, and tax revenues. Korea should move away from a focus on distribution and embrace a growth paradigm. Wealth should not be viewed as "unfair privilege" but as "resources for growth," and onerous tax burdens should not be framed as fairness. A change in perspective is needed.