Will taxing unrealized gains on stocks and real estate cause a stock market crash in South Korea? The South Korean parliament is discussing including unrealized gains on stocks and real estate in a comprehensive tax.

According to Yonhap News Agency, on June 23, members of the National Assembly from multiple parties, including the Democratic Party, the Progressive Party, and the Social Democratic Party, participated in a tax reform forum this morning. The core proposition of the forum was to promote a "comprehensive income tax system"—taxing assets based on substantial net asset appreciation, regardless of whether they are sold or not. Unrealized gains on investments such as stocks and real estate, i.e., book value increases, are also taxable. According to market data, the South Korean stock index plummeted 9.99% today, with KOSPI triggering a circuit breaker, and Samsung Electronics and SK Hynix leading the decline. The core issue of this South Korean tax forum was to transform the current system of taxing based on income into a comprehensive framework of taxing based on economic capacity—that is, regardless of the form of assets or whether they are realized, taxation is based on the substantial increase in net assets. Lee Sang-min, a senior researcher at the National Finance Research Institute of Korea, pointed out that if taxation only occurs at the time of asset realization, taxpayers will be motivated to hold back sales to avoid or delay tax payments, creating a "freeze effect" and hindering the flow of capital to more efficient sectors. The forum also proposed a more gradual implementation path: unrealized income is generally recognized as income, but the tax obligation can be deferred to the time of realization, or deferred with interest; for real estate and unlisted stocks whose market value is difficult to assess, the current taxation based on the time of realization can be maintained, or a pilot program can be launched only for high-net-worth asset holders.