tax

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Salaried workers' nightmare of tax increase
Akahata editorial (excerpts)

The government Tax Commission, an advisory panel to the prime minister, has put forward a 1.2 trillion yen tax increase plan that includes an end to the fixed-rate tax reduction, and cuts or abolition of various allowances concerning income and residential taxes.

Under this plan, if enacted, a family of four with the household head whose annual income is about 5 million yen will be forced to pay an extra 420,000 yen in tax a year.

Heavier tax burdens shifted onto ordinary people

The minimum taxable income in Japan is 3.25 million yen for a family of four. This amount is the lowest among five major countries. The minimum taxable income in the United States is estimated to be 4.62 million yen.

The Tax Commission is also considering increasing the consumption tax rate to over 10 percent. It is a regressive tax. Large corporations can shift the consumption tax burden entirely onto the price of their products or services.

On the other hand, the panel intends to maintain the current tax breaks for large corporations and the wealthy.

This shows that the tax "reform" conceived by Prime Minister Koizumi Jun'ichiro's cabinet is aimed at shifting more tax burdens onto the working masses as well as small- and medium-sized businesses and reducing burdens to be shouldered by large corporations and high income earners.

The proposed tax "reform" reminds us of a tax system reform the British Thatcher government carried out. During her tenure in office between 1979 and 1990, Prime Minister Margaret Thatcher reduced the highest income tax rate first from 83 to 60 percent, then to 40 percent. She also abolished tax breaks for low income earners.

The change widened the income gap which had been narrowing. Unemployment and business failures rapidly increased, and local communities collapsed, causing a rise in the crime rate.

Thatcherite 'poll tax'

In Japan today, income differentials are widening among young people as rapidly as those under the Thatcher government. The rates of suicide, unemployment, and bankruptcies are higher than ever before, and a massive tax increase under these circumstances can be a major source of the nightmare of further tragedies.

The Thatcher government in 1990 introduced a poll tax, the worst kind of mass taxation by which every adult is taxed. The people responded to this by organizing a large scale opposition movement beyond party affiliation, driving Thatcher into resignation. The poll tax was thus abolished.

Economic and Fiscal Minister Takenaka extols the poll tax as an ideal tax. His tax plan is tantamount to remolding the Japanese tax system as closely as possible to the Thatcherite poll tax system.

Let us stop the mass tax increase scheme just as the British people ousted the poll tax! - Akahata July 3, 2005