Isn't it a market where a thief wearing a Rolex occasionally appears and takes away my stocks? I think that regardless of how the financial investment service law is implemented or abolished, if only the commercial law account can be established, it would be much more meaningful and beneficial for our stock market. I believe that the financial investment service law account is about 500 times more important. 

Hello, I'm Lee Ho-seok. Today, we have a special guest, Representative Lee So-young. Hello! Yes, nice to meet you. Recently, there are hardly any stock investors who don't know you. Is that so? Yes, there is a lot of interest in you. The reason is that interest in financial investment has been growing, and it seems that interest in you has also increased. I saw a post you wrote this morning, and I heard that you gave up on an overseas business trip. I originally deal mainly with climate issues, and this time it's New York Climate Week.

I was invited as a panelist to an event with several small schedules, but I initially did not expect that the discussions on financial investment would be postponed until now. I thought that something would be finalized by early September, and that a business trip at the end of September would not be a problem. However, as it got delayed, it turned out to be an even more critical time. Therefore, as the person who first brought up this issue, I felt it wasn't appropriate to be absent during such an important discussion. So, I decided to give up my spot, and someone else will attend in my place. It's a bit disappointing because I'm also very active in this area, and I have a lot of interest in it; it's truly important work. Nonetheless, the discussions on financial investment have been prioritized to the extent that the schedule is being changed, highlighting the seriousness and necessity of this issue.

Could you please explain the current situation regarding your position and the party's stance? To be precise, the Democratic Party's position has not yet been finalized. This is because the stance of the party leader or the chair of the policy committee does not automatically represent the party's official position. While their views are important, decisions are made at the general assembly of the lawmakers, where all members gather. The policy assembly, which is supposed to discuss and decide on matters related to financial investment, has not yet convened. Therefore, the situation remains unconfirmed. I am currently urging that the policy assembly be convened quickly to finalize this issue. I have repeatedly stated my position on this matter: I believe that introducing a capital gains tax on stock transfers is something that needs to be done eventually, and it is a natural progression.

The basic premise is that we need to prevent money that should be entering our stock market from flowing out. This is important for the happiness of all citizens. Under this premise, if we introduce a capital gains tax on stock transfers in the current situation, not only will the returns be poor, but the expected returns will also decrease. Additionally, various market disruptions due to the capital gains tax, such as increased selling pressure at the end of the year, are clearly visible and will lead to several side effects. For stock investors, it becomes much easier to move to a market that offers better returns, even with taxes, but with less uncertainty. That market is the U.S. market. Therefore, given these concerns, the timing for introducing a capital gains tax on stocks is not right. As I have been saying, we have long advocated for better infrastructure.

However, due to opposition from the business community, the expansion of the duty of care for directors under commercial law has not progressed well. There has been a long-standing critique that shareholder returns in our country are weak and insufficient. For example, measures such as separating the taxation of dividend income have been proposed to enhance the incentives for dividends and to increase shareholder returns through expanded dividends. These institutional efforts should be pursued step by step. Regardless of taxes, the South Korean stock market is still worth investing in, and the expected returns are decent. At this point, introducing taxes would likely face much less opposition and concern than it would have before. However, the question remains: when will that moment be? Will it be in one year, two years? It's difficult to predict at this time. Additionally, just because we are amending commercial law or tax law doesn't mean that immediate changes will occur.

I don't think that will increase the market's reliability. So, we need to check how well these things are being implemented. For a considerable time now, our stock market has been stuck in a box for 17 years. The first time it hit 2000 was in 2007. That's right. So, we are at a point where we can visibly confirm that we are breaking out of the box and experiencing meaningful and healthy growth. At this stage, I believe we should persuade stock investors that we are moving towards a healthy and advanced market. Therefore, it seems to me that the next step is to establish a tax system, such as the capital gains tax on stocks, in line with this normal development. There are two important schedules regarding the revision of the Commercial Act. Your perspective is that the revision of the Commercial Act should come first. I’m not opposing that. In fact, I think the revision of the Commercial Act is about 500 times more important than the financial investment laws, from the perspective of stock investors.

Right now, you are enduring too much uncertainty and unfairness due to the management behavior that does not consider the interests of shareholders. For example, in order to save on inheritance tax, they artificially suppress stock prices. There are numerous actions that harm shareholder interests that are so outrageous they could only happen in broad daylight. I used the expression in yesterday's government questioning that it's like a thief wearing a Rolex watch occasionally appearing and stealing my stocks. Isn’t it a market where there is a pre-modern class system? Because, despite holding the same shares, the controlling shareholders act like nobles, manipulating this society to derive decisions that benefit themselves. Even though they have the same stake, ordinary shareholders see promising divisions being split off.

Suddenly disappearing or becoming something like a cash cow that generates 1 trillion won in operating profit can just vanish without a trace. It's absurd that such things happen. However, this is a truly backward market where we cannot prevent this with our laws. If we do not correct such management behaviors, how can I have confidence that my stocks will steadily grow in the future? Therefore, I believe that reforming the Commercial Act to establish that trust is of utmost importance. Honestly, I don't know how people will react when I say this, but regardless of how the implementation of the Financial Investment Services and Capital Markets Act and its potential abolition turns out, if we can at least have a product account, that would be much more meaningful and beneficial for our stock market. I am convinced of this. It is better to have a revision of the Commercial Act even without financial investment services than not to have a revision at all.

When people want to own something, the most important aspect is the certification of ownership. Isn't that the key concept behind wanting to possess something? However, in our country, stocks don't provide that. Even though you clearly bought them, it doesn't feel like they belong to you. One of the analogies that really resonated with me, as you mentioned, is comparing it to property tax. I found that very relatable. Instead of comparing it to capital gains tax, we should compare it to property tax. The perspective is that real estate is mine; when I buy a house, it belongs to me. But with stocks, it doesn't feel like they belong to me, which is where the issue arises. In the past, the concept of labor and capital was often seen as separate and opposing, but I believe that most people investing in stocks in our market are saving their labor income, their monthly salary, to invest.

Whether it's 10 million won or 20 million won, you're likely making investment decisions with that seed money. This is because it is difficult for our wage earners to gather enough money for a deposit for a rental house. It's certainly challenging to afford a home since housing prices are so high, and this doesn't even cover preparing for retirement. Therefore, ultimately, relying solely on earned income cannot resolve issues related to my future or stable housing for my children. This situation inevitably pushes individuals towards personal investment activities. In fact, today, labor and capital are not divided between those who earn money through earned income and those who earn through investment activities. Instead, those who earn money through labor are now also investing their earnings, creating an overlapping scenario. This means that a significant portion of the population is struggling to save money to invest.

However, when all of this is gathered, it amounts to a tremendous quantity. The people involved in politics or those leading the government need to ponder where this money should flow in order to be more beneficial to our nation and community. I believe they should create a direction based on this consideration. 

Now, if our citizens' money, which is aimed at generating wealth, flows into the real estate market, then real estate prices will rise significantly compared to now. This will lead to widespread unhappiness, as it will not help anyone. 

On the other hand, if this money goes into foreign stock markets and generates profits, it may benefit those individuals with higher returns. However, the money that should be coming into our companies is instead flowing out, which would not be good for our economy. It would be detrimental to creating additional jobs or advancing our industries in the long run.

If the people become unhappy, when this enters our stock market, it will increase the value of our companies and allow them to secure funding under better and cheaper conditions. This will activate new investments, and when new investments are stimulated, more jobs will be created. Consequently, many citizens will have access to more job opportunities and better salaries. This is how we can create a virtuous cycle. Therefore, rather than comparing labor income tax and capital gains tax to see which is higher and questioning why one is imposed while the other is not, we should focus on the choices available to us. We need to suppress high tax rates and promote low tax rates as an essential part of tax policy. This is the government's responsibility. While it is important to pave the way for our market and make it healthy, it is also crucial to recognize these economic incentives.

Rather, it is necessary to provide many benefits and incentives that attract money to this side, allowing citizens to build assets through our stock market. Therefore, the capital gains tax on real estate is somewhat more favorable than the taxes related to stocks, which will draw money in this direction. Thus, I believe it is appropriate to compare these two. Instead of just trying to prevent money from going into real estate, if we could slightly adjust the flow to encourage investment in stocks, I think money would come in. It seems that there are some barriers in that regard. Among my peers, ordinary office workers who are achieving decent returns from stock investments do not buy houses. The reason is that to purchase a house, they would have to sell their stocks. However, if they are confident that their stocks will rise further, they won't sell them. They are focused on growing their assets in the stock market. Just recently, for example, the apartments in Dongtan...

In some cases, the competition ratio for subscriptions has reached 3 million to 1. There have been news reports about this, and despite the intense competition for subscriptions, the expected return on investment in real estate is incredibly high if one wins the lottery. Additionally, if you own one house, you hardly pay any taxes, even if capital gains amount to several hundred million won. Currently, many people around me are flocking to this market. However, we need to address this issue. Shouldn't we discourage people from buying real estate? They might cut off loans and impose disadvantages, but with such high expected returns, it’s unlikely to deter them. Instead, we should provide a more stable and healthy alternative for asset formation. I believe that should be our stock market. I think the perception of making money through stocks in our country is still quite low. So, if I...

Before I start, I want to give you a book that I wrote with my daughter. When my daughter asked me how her dad could become rich, I couldn't help but say that investing in real estate has been the right choice so far. This is because I know that real estate has appreciated in value much more than stocks, and it seems that the government is also leaning in that direction. It's unfortunate that we are in a situation where I have to say this based on current experiences. 

In fact, if you look at the assets held by wealthy people in our country, the proportion of real estate is very high. If we consider the rankings of the richest people in the world, from first to tenth place, they are all stock billionaires—like Jeff Bezos and Elon Musk, who are all stock investors. However, when children see these stock billionaires, they start to dream and think, I want to start a business and create jobs too.

We should think about becoming such a person, but in our country, the real estate situation doesn't quite match that idea. So, it's a very unfortunate situation. The role of politics is to create new trends. To connect this with another question, shouldn't members of the National Assembly be investing in stocks? I mean, if they own stocks, it seems a bit off to create policies just to manage their own investments, but I feel they should take an interest in it. I agree with that, but the public sentiment is that people really dislike it when members of the National Assembly invest here and there. They think, Why do you need to pursue profit when you already have power and honor? Why do you want to make money as well? You shouldn't pursue both at the same time. There is this long-standing sentiment, right? This applies to bureaucrats in the executive branch as well as politicians.

To understand the mindset of those engaged in profit-seeking activities, one must engage in such activities themselves. However, this is often seen as taboo and criticized negatively, so many prefer to avoid it. Not participating is more comfortable, as it helps them avoid situations like being scrutinized during hearings or facing intense questioning. In reality, due to concerns over conflicts of interest, direct investments in specific stocks are not allowed, and once elected, they must place their assets in a blind trust during their term. Investing in index funds may be permitted, but creating complex assets that require annual reporting and documentation is undesirable. Consequently, most politicians refrain from stock investments. Additionally, they often advise their family members against investing as well, since they must report the financial activities of their spouse and any dependent children.

I heard that your child is investing in cryptocurrencies. Last year, there were significant issues with cryptocurrencies, right? Well, it's not necessarily a bad thing, but the negative attention and having your name mentioned in articles can be unpleasant. Therefore, I think the public's perception needs to change. While it is certainly not acceptable to engage in investment activities that could lead to conflicts of interest, it is important for lawmakers, as participants in our country's economy, to contribute to creating good policies. Since the pandemic, there has been a growing recognition that we cannot rely solely on earned income to live, leading to a surge of individual investors entering the stock market. Consequently, when these investors came in, they noticed many things that seemed off. Investors have done extensive research on LG Chem.

The differentiation of resources for children, this kind of situation happens quite often. As a result, we learn from it. When you get hurt, you realize that you are in a difficult situation. However, when you look from the outside, it’s not visible. I believe that members of the National Assembly should also experience this firsthand. They should come in and see the situation for themselves; then they will understand. It’s incredibly frustrating, and unless you experience it, you won’t realize how necessary change is. I really hope they try it out.

On the other hand, my voice is a bit hoarse today because I didn’t sleep well last night, and I apologize for that. Conversely, there are ways to engage current politicians. For example, having someone like Professor Lee Ho-seok enter politics is one approach. Experts who understand the market well and know how to improve the stock market can contribute significantly to politics.

I dislike it; it's dirty. Please don't do that. Participating in politics is actually a really good way to get involved. I feel like I've added another issue by bringing this up. The reason I'm mentioning this is because there's a congresswoman in the U.S. named Nancy Pelosi. She's really good at stock investments. When she buys something, it’s like when Buffett buys it; the stock prices just soar. 

So, as I observe the situation in the U.S., I think about how members of Congress are investing like this, buying individual stocks and call options. They’re engaging in all sorts of trades. This makes me wonder what the problem is. If they publicly disclose all their investments clearly, I don’t think there would be any issues. I still feel that way.

Everything will be made public, right? It is indeed made public. By March every year, if you go online, you can see everything disclosed, including the spouses and direct relatives of members of the National Assembly and the amounts they hold in various stocks. So, ultimately, it becomes a matter of perception among people. That's one aspect, and I actually think it's right to prohibit direct investments. The reason is that I am involved a lot in electric vehicles and renewable energy. After the recent electric vehicle fire, I argued that it wasn't the fault of the electric vehicle; it was the fault of the manufacturers and the government. I have also supported legislation that provides subsidies for renewable energy. But if I owned stocks in electric vehicles or renewable energy, what would happen? My asset management could be misunderstood as a conflict of interest, so there are those issues. Therefore, I think a compromise solution would be index funds.

I think it would be helpful to consider policies that would be better if there were assets in the KOSPI or KOSDAQ, even if it's not individual stocks, like a technology fund. When I listen to interviews with members of the National Assembly, it seems like they are still not fully aware of these issues, and there are many areas where they lack understanding. While I'm sure the points made by the members are being conveyed, there is still a frustrating aspect from the investors' perspective. That's why I wanted to share these thoughts. 

In conclusion, there have been various discussions and controversies surrounding financial investment, and I am cautious about predicting whether it will be beneficial or not. However, if you were to ask for my very personal opinion, I believe the atmosphere is changing, and the likelihood of improvement has significantly increased. This is just my personal view.

I understand. Then, the transition to discussing the capital market is positive from the investor's perspective. In my view, the stock prices started to rebound from this past Monday. I truly believe this is due to the sense of anticipation. Until last weekend, the reaction was somewhat skeptical, but since the weekend, the atmosphere has changed. You also posted something on Facebook, and that made people feel more optimistic, leading to a real increase in stock prices, which is continuing today. I genuinely think that has an impact. However, this alone cannot be the end. I believe the focus needs to shift to the Commercial Act. It would be great if you could explain why we need to shift our attention to the Commercial Act.

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