December 12, 2024
Japanese Communist Party Executive Committee Chair Tamura Tomoko, at a meeting of the House of Representatives Budget Committee on December 11, demanded that the government levy a tax on the 220 trillion yen in large corporations’ internal reserves which was added after the introduction of the “Abenomics” economic policy and use the additional tax revenue to directly support small- and medium-sized enterprises so that they can afford to give pay hikes to their workers.
Tamura said that under the guise of the trickle-down effect, the LDP-Komei government repeatedly cut corporate taxes and began a “system of tax breaks for companies where wages were increased” in 2013. She, however, pointed out that the benefits the companies received from the tax cuts did not actually trickle down to workers through higher wages, and that they only built up their retained earnings.
Tamura said that in particular, the increase in corporate internal reserves in 2022 and 2023 was very large, adding another 28 trillion yen to the reserved money while household consumption expenditures continued to decline almost every month due to the continuous rise in the cost of living.
Finance Ministry statistics show that the funds reserved internally by large corporations with a capital of one billion yen or more in fiscal 2023 totaled 539.3 trillion yen. The amount increased by more than 200 trillion yen compared to fiscal 2012, just before the start of Abenomics.
Meanwhile, workers’ wages have fallen to the level of the early 1980s. According to statistics of the Labor Ministry, the average of real cash wage in 2023 was 363,000 yen a month, down more than 70,000 yen from its peak of 434,000 yen in 1997. The 363,000 yen is the same level as the real cash salary in 1982, before the period of the “bubble” economy.
Tamura presented a proposal in which if large corporations use their internal reserves to raise wages, they would be allowed to deduct that amount from their taxable income. She again demanded that a portion of corporate internal reserves be utilized to boost wages for all workers.
Past related article:
> JCP Chair Tamura demands direct support for wage hikes at SMEs [February 3, 2024]
Tamura said that under the guise of the trickle-down effect, the LDP-Komei government repeatedly cut corporate taxes and began a “system of tax breaks for companies where wages were increased” in 2013. She, however, pointed out that the benefits the companies received from the tax cuts did not actually trickle down to workers through higher wages, and that they only built up their retained earnings.
Tamura said that in particular, the increase in corporate internal reserves in 2022 and 2023 was very large, adding another 28 trillion yen to the reserved money while household consumption expenditures continued to decline almost every month due to the continuous rise in the cost of living.
Finance Ministry statistics show that the funds reserved internally by large corporations with a capital of one billion yen or more in fiscal 2023 totaled 539.3 trillion yen. The amount increased by more than 200 trillion yen compared to fiscal 2012, just before the start of Abenomics.
Meanwhile, workers’ wages have fallen to the level of the early 1980s. According to statistics of the Labor Ministry, the average of real cash wage in 2023 was 363,000 yen a month, down more than 70,000 yen from its peak of 434,000 yen in 1997. The 363,000 yen is the same level as the real cash salary in 1982, before the period of the “bubble” economy.
Tamura presented a proposal in which if large corporations use their internal reserves to raise wages, they would be allowed to deduct that amount from their taxable income. She again demanded that a portion of corporate internal reserves be utilized to boost wages for all workers.
Past related article:
> JCP Chair Tamura demands direct support for wage hikes at SMEs [February 3, 2024]
