JCP will be breakwater against a consumption tax increase

Japan Press Weekly

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

JCP will be breakwater against a consumption tax increase
Akahata editorial

Fiscal policies proposed by the Liberal Democratic Party and Democratic Party of Japan are making people uneasy. An Asahi Shimbun poll published on August 18 found that more than 80 percent of the respondents said they are concerned about the lack of fiscal viability in the policies that the LDP and the DPJ promise to implement.

The public is afraid of a possible consumption tax increase that will make life more difficult for them.

DPJ plan

The ruling LDP and Komei Party have used every occasion to criticize opposition parties for failing to give a clear answer regarding how they are going to secure fiscal resources.

Waite a minute! Aren't they themselves the parties that must be held accountable for the national debt accumulated through squandering national revenues by increasing military expenditures, funding unnecessary large public works projects, and giving large corporations and major banks generous tax breaks?

The LDP-Komei government is making clear that they will raise the consumption tax, thereby openly displaying their inability to govern responsibly. However, they are trying to shift the heavier burden of the cost of their failure onto ordinary people. Without reflecting on their misgovernment, they are just trying to force citizens to accept their plan to raise the consumption tax rate. They are in no position to criticize opposition parties' proposals on financial sources.

What about the DPJ? Its president, Hatoyama Yukio has stated that no consumption tax increase will be necessary over the next four years, adding that consumption tax revenue will be used as resources for paying pension benefits.

The DPJ is in favor of the consumption tax. In the Diet, its members have been very supportive of the present system of taxation. DPJ member of the House of Representatives Furukawa Motohisa in 2004 stated that the consumption tax is a "fair tax with transparency." In the same year, DPJ member of the House of Councilors Igarashi Fumihiko stated, "A broad sharing of the burden by the public is an ideal system." It is already clear that a DPJ-led government, if established after the election, will eventually increase the consumption tax rate.

The DPJ proposed that the new government save 9.1 trillion yen by eliminating wasteful uses of tax revenue, 5 trillion yen by using reserve funds, and 2.7 trillion yen through tax reform. This saving can be part of the fiscal resources of 16.8 trillion yen, which the DPJ says is necessary for implementing government programs.

However, the reserve funds are exhaustible. If they are to be used for permanent programs, the government will shift the burden onto the public by increasing the consumption tax rate and other burdens to be born by the people once they run out. The DPJ is calling for the creation of a child allowance by abolishing the tax deduction for spouses and dependants. However, an estimated six million households will be forced to pay more in taxes.

What is more, most of the "wasteful uses of tax" the DPJ wants eliminated are subsidies for local governments, social programs, and education. The DPJ proposal means further cutbacks in budgets necessary for defending living conditions.

If wasteful expenditures are to be eliminated, the government must not forego a reduction in the five trillion yen military budget. By eliminating the "sympathy budget" for the U.S. Forces in Japan (280 billion yen), the budget to construct U.S. bases in Guam, and the cost for sending the Self-Defense Forces abroad, one trillion yen will be saved and can be redirected to other purposes.

The overly generous tax cuts of an annual seven trillion yen for major corporations and the wealthy also must be reviewed.

- Akahata, August 28, 2009