tax

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Government proposes further welfare cuts and tax increases

The Koizumi Cabinet's policy of cutting social welfare programs and imposing tax increases has become clearer than ever.

Tax increases

The government Tax Commission published a report on June 21 proposing to halve the exemption on income from salaries. It also suggested that deductions for spouses and dependent children be abolished.

It also proposed removing fixed-rate tax cuts on income and residential taxes.

Tax Commission Chair Ishi Hiromitsu said at a news conference that increasing the tax burden is inevitable in an aging society with a lower birth rate, adding that salaried workers, who account for 80 percent of Japan's workforce, must be counted on to support the national budget.

Welfare cuts

The Koizumi Cabinet on the same day approved the 2005 basic policy for economic and fiscal management and structural reform. It included a plan to increase the burden of medical expenses on patients who are 70 and older to up to 30 percent from the present 10 percent.

It also called for an effort to give shape to the consumption tax increase within a year. - Akahata, June 22, 2005