"'Semiconductors as public goods' is mere political rhetoric"
"Corporate profits are the reward for innovation and risk-taking"
Amid growing controversy over Labor Minister Kim Young-hoon's proposal to require chipmakers to share "excess profits" with society, Lee Woo-young, former chairman of the Human Resources Development Service of Korea (pictured), has gone public with a sharp rebuttal.
Lee posted a critique on his Facebook page Sunday, calling Kim's excess-profit sharing concept and the notion of semiconductors as a "public good" a "dangerous approach that could undermine the incentive structure — the most powerful engine of a capitalist market economy."
Drawing a parallel to past debates over windfall taxes on oil refiners, Lee said there is a growing push to label the enormous profits certain companies have earned amid the global AI boom as "excess profits" that fall outside a normal range.
"This argument sounds like a call to cap profits, and it risks eroding the principles of a market economy," he said. "If we are to share excess profits, who will be responsible when excess losses occur?"
Lee also characterized demands for additional redistribution of corporate earnings as "double taxation."
"Corporate profits are already subject to corporate tax, which is applied progressively," he said. "Demanding further profit caps or direct redistribution on top of that is hard to defend against the charge of being an anti-market measure."
He was equally dismissive of Kim's recent framing of semiconductors as a public good.
"The argument that because the government provided tax breaks and infrastructure such as power and water, corporate profits must be shared for the public good is closer to political rhetoric than sound economics," Lee said.
He added that government support is not a favor to specific companies but a strategic investment to secure national competitiveness and create quality jobs. "The logic that taxpayer-funded support for a particular industry therefore requires that industry's profits to be socially redistributed simply does not hold," he said.
Lee also stressed that corporate profits are the reward for innovation and risk-taking.
"Attempts to artificially cap corporate profits, or to impose a public-goods framing and redistribute them directly, could dampen companies' appetite for investment and erode national competitiveness," he said. "True profit-sharing with the public means enabling companies to invest more, create better jobs and pay more in taxes."
He added that "the foundational principle of a sustainable state lies in a free-market economy," warning that South Korea "is being swayed by a dangerous policy temptation."
Kim has argued that there is a social need to discuss ways for chipmakers such as Samsung Electronics and SK Hynix to share excess profits with subcontractors and partner firms throughout their supply chains. The Korea Employers Federation pushed back the previous day, issuing a special recommendation stating that "the distribution of corporate profits is not a subject for collective bargaining." The Federation of Korean Trade Unions countered Sunday, calling the employers' stance "an anachronistic attempt to shut down any discussion of profit-sharing."
fact0514@heraldcorp.com
