At the core of this discussion is a tax theory called the ‘net asset increase theory’. The current tax law is based on the 'income source theory', which taxes assets when they are actually sold and the profits are confirmed, but some political circles and civic groups define this as a 'tax gap'. They believe that the taxpayer's economic ability has substantially increased due to the increase in asset values ​​alone, and argue that income should be comprehensively taxed regardless of whether it is realized or not. In particular, their core justification is the logic that the 'freeze effect', in which high-net-worth individuals postpone tax payments indefinitely by holding assets rather than selling them, hinders the efficient flow of capital.

However, there are prevailing concerns that the impact on the real economy could be very complex and dangerous. The biggest problem is that taxpayers may face a ‘liquidity crisis’ where they have to pay taxes without cash flow. For example, when stock or real estate prices soar, you may be forced to sell your assets at a low price if you have to pay taxes based on the assessed value. This maximizes the volatility of the asset market and is likely to cause enormous social costs and confusion in the process of calculating the tax base itself, especially in the case of unlisted stocks or real estate whose prices are difficult to predict.

Looking at overseas cases, we can see how hot a potato this ‘unrealized profits taxation’ is. Recently, the Netherlands passed a law that applies a 36% tax rate to unrealized profits from financial assets, but due to strong opposition from investors and concerns about capital outflow, the law is undergoing the throes of revision and full review even before implementation. This suggests that this could accelerate the ‘capital flight’ phenomenon, in which innovative assets or highly liquid financial products move to tax-friendly countries to avoid the tax burden. There is a series of warnings that if the government unreasonably expands the scope of taxation to make up for tax revenue deficits, it may become an 'own goal' that undermines the competitiveness of the national economy.

From a political perspective, this discussion emerged at a very sensitive time, coinciding with the stock market plunge and amplifying the controversy. In a situation where the market is unstable, with the KOSPI recently plummeting by nearly 10%, many say that this taxation move by politicians has acted as an ambush that dampens investment sentiment. In particular, as it overlapped with political variables such as President Lee Jae-myung's decline in approval ratings, this debate went beyond a simple academic debate on taxation and degenerated into a symbol of political conflict. Experts understand the purpose of increasing the fairness of taxation on capital income, but they agree that a very cautious and conservative approach is needed considering the impact the introduction of the system will have on the overall economy.