Capital gain tax breaks of 20 billion yen shared by only 7 persons

Japan Press Service Co., Ltd. is the only news agency providing information of progressive, democratic movements in Japan

Capital gain tax breaks of 20 billion yen shared by only 7 persons

It was revealed that only seven persons shared yearly benefit of about 20 billion yen from capital gain tax breaks, indicating that a handful of wealthy people are enjoying an enormous amount of benefits from the preferential taxation policy.

Japanese Communist Party House of Representatives member Sasaki Kensho found this out based on his research using the National Tax Agency's data on declared income taxes in 2005.

The amount of tax cuts by reducing the tax rate to 10 percent from 20 percent levied on capital gains from trading in stocks was 265.2 billion yen, an increase of 129.5 billion yen from the previous year.

Among 314,163 persons who declared such capital gains, 12,298 persons (3.9 percent) earned more than 50 million yen from the trading in stocks. The amount of their tax cuts was 173 billion yen, which accounted for 65 percent of the total amount of tax cuts.

Furthermore, only seven persons (0.002 percent of all who declared capital gains) made more than 10 billion yen. Their tax cuts amounted to about 20 billion yen, equivalent to 2.9 billion yen each.

The Abe Cabinet is attempting to extend the tax break which is to expire in the FY 2007 for one more year in order to keep giving favorable treatment to the wealthy.

Sasaki criticized the government for increasing poverty and social disparities by imposing heavier taxes on the public while providing benefits to large corporations and the rich. He demanded that the government put an end to the preferential tax break and instead impose fair tax burdens on the wealthy.

Up to 2002, the capital gain tax rate was 26 percent. The government in 2003 cut the rate to 20 percent and further took a temporary measure to halve it to be effective until 2007.
- Akahata, February 28, 2007