Kim Yong-beom’s National Dividend Proposal Sparks Uproar.

• “The fruits of the AI infrastructure era are not solely the result of specific corporations. A portion of these gains must be structurally returned to the people.”
• Kim Yong-beom (Blue House Policy Secretary) posted this on Facebook, sparking massive controversy.
• He argued, “Beyond being a nation that supplies AI infrastructure, we have the potential to become the first country to redistribute AI-era excess profits into human lives.”
• Kim’s post is open to misinterpretation. The suggestion is not to split corporate excess profits but to systematically use the increased tax revenue that naturally follows higher corporate earnings.
• The Blue House distanced itself, calling it “Kim Yong-beom’s personal opinion.”
• Bloomberg analyzed that the Kospi index’s swing—rising to 7,999 then falling to 7,423—was triggered by Kim’s post.
• Stock prices recovered to close at 7,643. Foreign investors net-sold ₩5.6 trillion worth of shares.
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Corporate Tax Revenue to Hit 120 Trillion Won This Year?

• Last year’s corporate tax revenue was 85 trillion won—this year, it is likely to exceed 120 trillion won.
• The additional tax revenue is already earmarked for repaying public funds, national debt, and supplementary budget financing.
• Kim Yong-beom told a Chosun Ilbo reporter, “This isn’t about raising taxes—it’s about utilizing only the surplus revenue.”

What Matters Now.

National Dividend from Surplus Tax Revenue? Why Not?

• Kyunghyang Shinmun’s editorial assessed, “Kim Yong-beom’s critical awareness is valid.”
• “In an AI era where excess profits are likely to concentrate among a minority, his proposal deserves public debate as a measure to mitigate inequality.”
• Kim’s proposal assumes a transition to a tech-monopolized economic structure. Some argue more cautious and restrained analysis is needed.
• The Hankyoreh also claimed in its editorial, “Beyond utilizing surplus tax revenue, legal and institutional frameworks must be discussed to allow the public to share a portion of excess profits through funds or additional taxes.”
• The Korea JoongAng Ilbo’s editorial noted, “How far redistribution should be allowed and tolerated is one of the most challenging issues requiring extensive deliberation,” adding, “This feels like a careless suggestion.”
• Seo Kyung-ho (JoongAng Ilbo columnist) emphasized, “I do not believe basic income—which was shelved due to funding issues—will resurface,” insisting, “Temporary surplus tax revenue should be used for structural reforms, growth engines, and debt repayment.”
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Techno-Socialism?

• Chosun Ilbo and JoongAng Ilbo elevated Kim Yong-beom’s post to front-page headlines, amplifying the controversy. JoongAng Ilbo featured a photo of Lee Jae-myung (President) under the headline “AI Wealth Redistribution Theory.”
• Jo Dong-geun (Myongji University professor) noted, “The potential for investment contraction or weakened innovation momentum must also be considered.”
• Jang Dong-hyeok (People Power Party leader) criticized, “Isn’t the government seizing corporate profits and redistributing them something only a communist party would do?”
• Chosun Ilbo’s editorial claimed, “If the government seeks to take corporate profits through ‘national dividends’ instead of taxes, it requires legislation and borders on violence rather than policy”—a distortion and overreach.
• Kim Yong-beom initially proposed calling surplus tax revenue “national dividends,” not advocating for a separate “non-tax national dividend.” Did the KOSPI drop because of Kim Yong-beom?
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“The problem is money isn’t circulating.”.

• Lee Jae-myung (President) said this at a State Council meeting. “There are voices demanding austerity like a broken record, but that’s irresponsible—it’s telling us to ignore people’s suffering,” he noted.
• “There was a time when frugality was a virtue, but now we need to invest in strengthening the nation’s capabilities. By pursuing active fiscal policies to stimulate domestic demand and raise economic growth rates, we can achieve a virtuous cycle where the economy’s growth potential thickens.”

Bad Bank, Chasing Debts for 23 Years, Liquidated by a President’s Word.

• Established during the 2003 credit card crisis, the bad bank is still collecting debts. It began by taking over 5 trillion won in debt from 860,000 people—110,000 still owe 845 billion won.
• Industry insiders called Sangnoksu (a special-purpose company) a “golden goose.” Financial institutions that invested in it received over 10 billion won annually in dividends.
• President Lee Jae-myung cited a Kyunghyang Shinmun report, asking, “Is it aligned with the public’s moral sentiment to demand repayment until death, even by selling a single bean sprout?” He criticized it as “primitive predatory finance.”
• The Financial Services Commission hastily held an emergency meeting and decided to sell all debts to the New Leap Fund. Since last October, the fund has purchased 8.1629 trillion won in long-term delinquent debts from 640,000 people.
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Local Elections in Three Weeks: Unification as the Wildcard.

• Pyeongtaek’s re-election, the Ulsan mayoral race, and the Busan Buk-gap by-election are the most fiercely contested.
• In Pyeongtaek, Kim Yong-nam (Democratic Party candidate) and Cho Kuk (Reform Party candidate) are locked in a tight battle within the margin of error.
• In Ulsan, Kim Sang-wook (Democratic Party candidate) and Kim Jong-hoon (Progressive Party candidate) are also in a close race. The Progressive Party proposed an electoral alliance, but the Democratic Party is distancing itself.
• In Busan Buk-gap, the unification of Park Min-sik (People Power Party candidate) and Han Dong-hoon (independent candidate) is the variable. While most polls show Ha Jung-woo (Democratic Party candidate) leading, Park Min-sik stated, “I don’t think a three-way race is disadvantageous.”

Deep Dive.

Samsung Electronics Performance Bonus Talks Collapse.

• The union is demanding that 15% of operating profit be allocated as a performance bonus fund and that the bonus cap be permanently abolished.
• Management proposed using 10% of operating profit as the fund and offering additional compensation through special awards.
• If the union declares the mediation deadlocked, the National Labor Relations Commission’s mediation will end. The union has announced an 18-day strike from the 21st to the 7th of next month. Some estimate damages could exceed 30 trillion won.
• The government may invoke emergency mediation powers. These can be activated if the dispute is deemed to jeopardize the national economy.

354 Trillion Won in Profit, 623 Trillion Won in Investment.

• 623 trillion won includes research and development investments.
• From 2017 to last year, Samsung Electronics’ facility investments totaled 399 trillion won—more than the money it earned.
• Analysts predict Samsung’s operating profit will reach 300 trillion won this year. Some argue that even after paying 45 trillion won in performance bonuses, the company has sufficient cash reserves. However, its planned facility investments for this year alone exceed 100 trillion won.
• Chosun Ilbo noted, “To prepare for the memory winter expected in three years, the company must stockpile cash.” Projections suggest the semiconductor cycle will turn downward starting in 2029.

“Samsung Electronics’ Board Must Step In.”.

• Lee Yong-woo (director of the Economic Plus Institute, former Democratic Party lawmaker) criticized, “SK Hynix got the first button wrong.”
• Operating profit cannot be the performance bonus standard. The argument is that after deducting interest costs and corporate taxes from operating profit, profit distribution should be determined based on net income.
• Jeong Seung-il (policy committee member of the Welfare State Society) pointed out, “From Samsung Electronics employees’ perspective, they have no choice but to wage a profit struggle, arguing, ‘Speculators are taking 80 trillion won through stock buybacks and dividends—how can 45 trillion won for us be excessive?’”
• The KOSPI 10,000 and 200 trillion won operating profit era is uncharted territory. Lee emphasized, “It is the board’s role to establish principles and mediate conflicts.”
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Lee Sang-min Sentenced to 9 Years in Prison on Appeal.

• He is accused of actively participating in the insurrection, including ordering power and water cutoffs to media outlets. The first trial sentenced him to 7 years, but the appeal added 2 more.
• Lee Sang-min (former Minister of the Interior and Safety) claimed, “There was no intent to disrupt the constitutional order,” but this was rejected.
• The court noted, “Lee was well aware of the illegality of the martial law declaration” and criticized, “Despite this, he consistently showed an attitude of tolerating the declaration or attempting to evade legal responsibility.”

Another Take.

Gwanghwamun Square’s New Monument: A Rifle at Attention.

• Seoul City installed a sculpture commemorating Korean War veterans under the name “Garden of Gratitude.”
• Critics argue that a rifle-shaped monument in a democratic landmark is anachronistic.

U.S. Inflation Shock.

• The highest level since the COVID-19 pandemic and the Russia-Ukraine war. From 2.4% in February, it jumped to 3.3% in March, hitting 3.8% in April. Exceeding market expectations.
• Gasoline prices surged over 50%, hitting $4.50 per gallon. Grocery costs rose 2.9%, with fruits and vegetables up 6.1%.
• Analysis shows inflation outpacing wage growth. Hourly wages rose only 3.6%. Hourly income fell 0.3%. Consumer sentiment is at a historic low.
• The U.S. economic slowdown has global repercussions. With midterm elections in November, Trump has every reason to be impatient.
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Korean Students Rank 3rd in Academic Skills, 34th in Mental Health.

• UNICEF’s survey of 44 countries.
• Only 65% reported life satisfaction—ranking 32nd out of 37.
• Suicide rate among 15–19-year-olds: 10.9 per 100,000, 5th highest among 40 countries.
• Kim Hyun-soo (Myongji Hospital professor) stated, “Adults who force children to study with medication should reflect.”
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Even Single-Homeowners Must Sell Rented Properties.

• Until now, buyers in land transaction permit zones had to move in within four months—making it difficult to purchase tenanted homes.
• The government will now defer the residency obligation until lease contracts expire for transactions applied by year-end.
• Yoo Sun-jong (Konkuk University professor) criticized, “It’s illogical to delay land transaction permits and urge sales without clear information on special tax exemptions or holding taxes,” adding, “The effect on increasing listings will be minimal, and market confusion will only grow.”
• Chosun Ilbo noted, “Buyers face pressure to ‘sell now’ without knowing penalties for holding on,” calling the policy sequence “backward.”
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The Fix.

57 Foreign Safety Leaders.

• Foreign mentors who provide safety training to migrant workers.
• There are 57 foreign safety leaders in the Busan-Ulsan-Gyeongnam region alone. The system was established following the 2024 Arisel disaster.
• South Korea’s migrant worker population grew from 400,000 in 2021 to 500,000 last year. Industrial accident victims increased from 7,030 to 9,872. Of 113 industrial accident fatalities in the first quarter of this year, 16% were foreigners.

Welfare Benefits Without Applications.

• This change follows Lee Jae-myung (President) calling the “application-based system a cruel policy.”
• Child allowances and parental benefits previously required applications to receive, but will now be automatically granted if eligibility is met.
• Child allowances provide 100,000 won monthly per child under age nine; parental benefits offer 1 million won for infants and 500,000 won for one-year-olds.
• Crisis household support will also allow welfare officers to initiate applications ex officio.

ICYMI.

Hyundai’s 50 Years of Exports: 76.55 Million Vehicles Delivered.

• End-to-end, the exported vehicles could circle the Earth nine times. The 80 million mark will likely be crossed next year.
• Cumulative production since the 1955 “Sibal” model exceeds 130 million units.
• Electric vehicles are the wild card. Chinese EVs are projected to capture 34% of the market next year.

When Will Samsung Electronics and Nix Peak Out?

• Focus on profit growth rates, not absolute profit size.
• Lee Sang-hun (IM Securities researcher) emphasized, “The period when profit growth rates pass their peak is the peak-out signal.”

No Imperial Protocol.

• When Trump visited China nine years ago, the Forbidden City was entirely emptied for his reception, with lavish treatment.
• This time, the meeting occurs not in the Forbidden City but at Tian Tan Park. While the park—where Ming emperors prayed for peace—holds symbolic weight, observers note a deliberate scaling back of ceremonial formality.

Worth Reading.

Performance Bonus Jackpot: Possibly the Final Windfall.

• Lee Jin-woo (POSTECH professor) criticized, “Korean conglomerate unions are interest groups for the privileged at the top of the wage distribution,” adding, “Their role has diminished to an organization representing only their members’ interests, not a body advocating for socioeconomically vulnerable workers.”
• South Korea’s unionization rate stands at just 13%—2–3% of all wage workers. Large corporations account for 14% of the workforce, yet average wages at conglomerates (6.13 million won) are double those at SMEs (3.07 million won).
• Lee assessed, “While it appears as labor’s triumph in the AI era, this is a one-time bonus occurring at the last opportunity for labor to freeload on capital’s momentum.”

What the State Must Do.

• Lee Jin-soon (professor at Sungkonghoe University) categorized the Samsung Electronics performance bonus controversy into three points.
• First, there is the argument that if semiconductor plants halt, the national economy will falter,
• second, criticism that labor movements have neglected social solidarity and responsibility,
• third, counterarguments that it is only natural for workers to share in corporate excess profits.
• All three are valid. However, semiconductors are a nationally nurtured strategic industry. Lee Jin-soon pointed out, “The state’s role is missing.”
• The proposal is to “establish society-wide guidelines for distributing excess profits from state-supported strategic industries and begin designing national systems for recovering public funds and reinvestment.”
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