Our Proposal: The Three-Pillar Integrated Model

This chapter presents the authors’ concrete policy package for a new income security system in South Korea, integrating three core components: Common Wealth Dividends, a Negative Income Tax (NIT)-type basic income, and a Universal Earned Income Tax Credit (Universal EITC). First, the “Common Wealth Basic Income” is established by converting regressive basic personal tax allowances into universal refundable tax credits and distributing revenues from a Land Value Tax and Carbon Tax. This pillar provides a universal dividend equivalent to 3% of per capita GNI. Second, the NIT-type basic income provides a guaranteed income floor set at 10% of the average income for adults and 20% for children and the elderly, financed by a 10% tax on excess income. Utilizing a comprehensive definition of income including imputed rent, this scheme replaces categorical benefits like the Basic Pension and partially substitutes means-tested social assistance. Third, the authors propose transforming existing employment income deductions and credits into a “Universal EITC” operating on an individual basis without a phase-out range. This acts as participation income to subsidize social insurance premiums for precarious workers, eliminating blind spots.