[TODAY] In terms of tax, stock exchange is better than coins
[Today] 2020.06.29 The Kospi index slipped 1.93 percent to dip below the 2100-point level on Wednesday. Individual investors purchased 575.3 billion won worth of stock but were outpaced by foreigners and institutions that sold off more than 580 billion won, combined. One contributing factor was the New York Stock Exchange having fell nearly 3 percent as a result of a worsening Covid-19 outlook. Worse yet, the domestic stock market was also affected by news that the government would tax gains on real estate investments. #What would coin tax look like? Investors are speaking out against the government’s new plan for a finance tax. Local authorities say that only 30,000 stock investors in the country would be required to pay a 20 percent tax on surpluses as it will exempt tax for gains of up to 20 million won. This group would only account for 5 percent of all stock investors in Korea. According to the Korea Institute of Public Finance, nine out of 10 local investors made less than 10 million won per year in the past 11 years. In other words, the number of individuals that would be actually be affected by this changed law is minimal. The government also claims the new law would have zero effect in increasing tax revenue, as it also will be cutting transfer tax. Regardless, investors are angry. For their part, the biggest complaint is double-taxation: If the government claims tax from investment gains, why do they collect transfer tax? The government’s justification is that the object and the purpose of the two are different and therefore the practice cannot be called double-taxation. But from the investor’s view, they’re both taxes. Another complaint is the monthly tax collection. Taxing investment gains this way would take away the compound effect that investors expect from stock market trades. If it wasn’t for the tax, they would be investing more each month, but charging tax by each month would reduce that amount. Then what happens to coin investments? A reformed tax plan will roll out this month and coins will be taxed by their investment surplus like stocks. But the gains here won’t be classified as financial gains but transfer income. They won’t be subject to the basic deduction. Every time an investor makes money, they’ll have to pay 22 percent of the surplus. Taxation will start next year. Unless one’s expecting to earn big, it’s better to invest in stocks than coins. It’s time crypto investors team up to request a reasonable taxation plan.