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[AI Library] Chapter 3: Standing with 14 Million Retail Investors
The Traces Han Dong-hoon Left on South Korea
Chapter 3: Standing with 14 Million Retail Investors
Kim Kyung-jin
Traces Han Dong-hoon Has Left on South Korea
Abolishing the Financial Investment Income Tax
Standing with 14 Million Retail Investors: Han Dong-hoon and the Abolition of the Financial Investment Income Tax
1. What Was the Financial Investment Income Tax?
The Financial Investment Income Tax, or FIIT for short. It was a system that levied taxes on income earned from financial investments such as stocks, bonds, funds, and derivatives if annual income exceeded 50 million won. Following the principle that "where there is income, there is taxation," the bill was passed in December 2020 by bipartisan agreement during the Moon Jae-in administration. It was originally scheduled to take effect in 2023, and was later postponed to January 2025.
On the surface, it sounds reasonable. If you made a lot of money from stocks, shouldn't you pay taxes? But reality was far more complicated.
Starting in 2022, the securities transaction tax was being lowered in stages in preparation for implementing the FIIT. In other words, it was a trade-off: lower the transaction tax in exchange for collecting the new FIIT. However, as the FIIT implementation was repeatedly postponed, the transaction tax had been reduced while the FIIT was not being collected, creating a "tax revenue gap." Conversely, if the FIIT was implemented as scheduled, investment income would face double taxation on top of the already-reduced transaction tax, raising concerns about investor exodus.
Above all, what retail investors feared was market contraction. In a situation where profits from the Korean stock market would be taxed while overseas market investments would remain under the existing capital gains tax system, it was inevitable that the domestic stock market would lose its appeal. This was the common concern of 14 million retail investors.
2. From General Election Platform to Party Leader's Agenda
On January 2, 2024, President Yoon Suk-yeol announced at the stock market opening ceremony that he would push to abolish the FIIT. The People Power Party aligned with this and made the abolition of the FIIT a campaign pledge for the 22nd general election.
Han Dong-hoon was at the forefront of this pledge. As chairman of the People Power Party's emergency response committee at the time, Han Dong-hoon led the general election campaign and pushed the abolition of the FIIT as one of the key livelihood pledges.
However, the election results were a crushing defeat. With the People Power Party winning only 108 seats, the outlook for abolishing the FIIT became uncertain. The structure was such that without the approval of the major opposition party with 175 seats, the bill could not pass.
Han Dong-hoon did not give up. After being elected as chairman of the People Power Party on July 23, 2024, he declared from the very first supreme council meeting: "I will make realizing policies most urgent to people's livelihoods, including the abolition of the FIIT, our top priority."
3. Han Dong-hoon's Strategy: Public Opinion Campaign and Ground Pressure
For a minority opposition leader with 108 seats to change the position of the ruling party with 175 seats, the battle had to be fought outside Parliament, not inside it. Han Dong-hoon's strategy was to rally investor opinion and encircle the Democratic Party.
On August 27, Han Dong-hoon visited the Korea Exchange in Yeouido, Seoul. He chose the securities sector as the location for his first field meeting since taking office as party chairman. He met with the exchange president and industry practitioners and stressed the necessity of abolishing the FIIT. He also broadened the front by mentioning corporate inheritance tax issues and separate taxation of dividend income, going beyond the FIIT abolition.
"Let us reduce gaps in housing, assets, care, and education. Through value-up policies for the capital market, we must create more ladders for asset formation and make them more accessible. That is why the People Power Party is focusing on abolishing the FIIT."
He framed the FIIT not as a simple tax issue but as a matter of "reducing asset inequality" and "enabling young people to build assets." The logic was that this was not about cutting taxes for the wealthy, but about protecting young people and the middle class who were accumulating assets through stocks.
On September 1, Han Dong-hoon raised the FIIT as a key agenda item in his first inter-party meeting with Democratic Party Chairman Lee Jae-myung. Outside the meeting room, in front of the National Assembly's main gate, retail investors from the Korea Stock Investors Union were holding a rally urging the Democratic Party to abolish the FIIT.
On October 4, he attended an investor rally in front of the National Assembly and pressured the party, saying: "The Democratic Party will change its position anyway, but postponement and abolition are completely different. Since you're changing course, please choose the abolition that 14 million investors truly want."
The core of Han Dong-hoon's position was demanding "abolition" rather than "postponement." A postponement, with implementation two years later, would leave uncertainty. Investors knew that the same debate would repeat two years down the line. Han Dong-hoon consistently advocated for "complete abolition" from beginning to end.
4. The Democratic Party Reverses Its Position
The Democratic Party was internally divided. The leadership, centered on Policy Committee Chairman Jin Seong-jun, took the position that "it should be implemented as planned." They based their argument on the principle that "where there is income, there is taxation" and the logic that abolishing the FIIT would benefit only the top 1%.
However, the backlash from 14 million retail investors was fierce. Comments demanding the abolition of the FIIT flooded Policy Committee Chairman Jin Seong-jun's social media accounts. The Korea Stock Investors Union held rallies in front of Democratic Party headquarters. Protest messages poured in to Democratic Party members.
The decisive variable was Democratic Party Chairman Lee Jae-myung himself. As the backlash from individual investors grew, Lee directly stepped in and shifted his position, advocating caution. The Democratic Party also began reviewing its hardline party position internally.
Then, on November 4, 2024, the Democratic Party officially announced its agreement to abolish the FIIT.
Han Dong-hoon responded immediately: "While the Democratic Party is late, late as it is, I welcome its decision to join in the complete abolition of the FIIT. In the end, on livelihood matters like this, there are no ruling or opposition camps."
It is notable that he repeated "while late" twice. He subtly but clearly pointed out that this was the result of months of pressure he had applied.
5. The Final Hurdle: Voting Under Martial Law
Even after the Democratic Party agreed to abolition, a difficult path remained to pass the bill. In early December 2024, the ruling and opposition parties were in a state of extreme confrontation over the budget bill. As the FIIT abolition bill was pushed to the back burner, retail investors even sent protest messages to Democratic Party members calling them "traitors to South Korea."
On December 3, an unprecedented state of emergency martial law was declared. Even as the political world fell into chaos, the FIIT abolition faced an imminent January 1, 2025 implementation date and could not be delayed any further.
On December 10, 2024, an amendment to the Income Tax Act that included the abolition of the FIIT and a two-year postponement of cryptocurrency taxation was put to a vote in a plenary session of the National Assembly. It was passed with 204 votes in favor, 33 against, and 38 abstentions out of 275 members present.
204 votes in favor. An overwhelming number. Not only People Power Party members but also a significant number of Democratic Party members voted in favor. It was a complete reversal of the Democratic Party's position that, just three months earlier, had insisted on implementing it as planned.
6. What One Person Changed
The credit for abolishing the FIIT cannot be attributed to Han Dong-hoon alone. President Yoon Suk-yeol declared the abolition, FSC Chairman Lee Bok-hyun echoed him by calling forced implementation a "cowardly decision," 14 million retail investors took to the streets, and even within the Democratic Party, Chairman Lee Jae-myung shifted his position.
But in the midst of all these developments, it was Han Dong-hoon who consistently spoke only of "abolition," organized public opinion, visited the field, pressured the opposition, and placed the issue on the negotiation table.
As emergency response committee chairman, he sowed the seed as a general election campaign pledge. Though the election was lost, he did not give up. As soon as he became party leader, he made it his first agenda. He opened the front at the Korea Exchange field meeting. He directly demanded it at inter-party leadership talks. And he went to investor rallies and raised his voice alongside them.
Changing the party line of a party with 175 seats with only 108 seats is impossible by the logic of numbers alone. Han Dong-hoon used public opinion as his weapon instead. He proved that the voice of 14 million investors was stronger than the number of seats in Parliament.
"In the end, on livelihood matters like this, there are no ruling or opposition camps."
This was what Han Dong-hoon said right after the FIIT abolition. This single sentence summarizes the essence of this struggle. The abolition of the FIIT was neither a victory for the ruling party nor a defeat for the opposition. It was solving a problem directly connected to the daily lives of 14 million citizens by transcending factional boundaries. Han Dong-hoon was the person who wielded the hammer needed to break through that wall.
Kim Kyung-jin
Attorney · Former Member of the National Assembly · AI Policy Researcher
© 2026 Kim Kyung-jin. All rights reserved.