South Korea Scraps Capital Gains Tax Plans After Retail Backlash

South Korea has abandoned a controversial plan to lower the capital gains tax threshold for stock investors, marking President Lee Jae Myung’s first major policy reversal since taking office in June.

The decision follows months of opposition from Lee’s core voter base, many of whom are retail investors. Proposed changes — including lowering the capital gains tax threshold on stock holdings to 1 billion won ($717,535) from 5 billion won — raised questions about the government’s commitment to reviving the stock market and triggered a selloff in August that erased billions in value.

On Monday, the benchmark Kospi Index rose ...