Basic principles that should be sought by taxation system include equity and efficiency. Although all worldwide countries repeatedly make an effort to enact taxation system satisfying equity and efficiency, it is extremely difficult to create the taxation system that can satisfy these two matters simultaneously.
Although inheritance tax has a purpose of procuring fiscal revenues like other taxes, in terms of social policies, it becomes more important to perform a function of inhibiting unjust concentration of wealth while assuring market economic order, and private ownership.
The inheritance tax system started to be introduced in earnest in the cause of social equity and equal opportunity after the 20th century, and a view that the inheritance tax should increase has been dominant afterwards. However, as the skepticism about inheritance system appeared in the late 1970's in part of countries, an attempt to replace it by capital gains tax, or reduce the burden of the inheritance system started. This means that inefficiency of inheritance tax that affects the whole national economy can be higher than the advantage obtained from inheritance tax.
In the meantime, Korea taxation system related company inheritance has been institutionalized so that it is strengthened little by little focused on economic equal opportunity through inhibition of wealth concentration and increase of social responsibilities of companies. Under the current inheritance tax system. it is very difficult for most of chaebeols to inherit managerial rights. If they pay taxes according to the law, not only the inheritance of managerial rights is impossible in fact, but also the companies inevitably become fragile to threat of hostile M&A.
Finally. various expedients appear around the inheritance of managerial right, and in the long term, efforts for creative managing activities of economic subjects that create wealth are lowered. Like these cases, there arise many side effects.
The Korean should minimize social costs resulting from managerial disputes by using appropriate systems for stable managerial rights, and should enact taxation systems, which meet the global economy era, in order to induce flourishing company activities to prepare the foundation for companies competing equally with other foreign companies on the world stage, and these measures will be the very starting points toward pragmatism.