Introduction

This chapter introduces a comprehensive proposal for a new income security system in South Korea designed to achieve freedom, equality, and sustainable efficiency. Amidst rising inequality exacerbated by the AI revolution, an escalating global climate crisis, and a severe demographic crisis caused by the world’s lowest fertility rate, particularly in South Korea, traditional welfare systems are insufficient to address current challenges. While South Korea has engaged in intense political debates over Universal Basic Income, concerns regarding fiscal sustainability and work incentives have hindered its implementation. Building on a theoretical comparison between Universal Basic Income and Negative Income Tax, the authors propose a realistic policy package composed of three pillars: a “Common Wealth Dividend Basic Income” financed by land and carbon taxes; an “NIT-type Basic Income” administered via refundable tax credits to partially replace means-tested social assistance; and a “Universal Earned Income Tax Credit (EITC)” serving as participation income for all working persons. This proposal aims to minimize work disincentives by carefully managing effective marginal tax rates while ensuring fiscal neutrality. By shifting to an individual-based system, the proposed model removes the “marriage penalty” and provides robust incentives for household formation. The chapter outlines the book’s analysis of the fiscal, administrative, and political feasibility of these reforms.