June 25, 2014
The Abe Cabinet on June 24 approved basic economic policies and a new economic growth strategy. Japanese Communist Party Secretariat Head Yamashita Yoshiki on the same day issued a statement criticizing both for benefiting only large companies.
Following is excerpts of his statement in regard to the tax system proposed in the two policies:
Regarding cuts in corporate tax rates, a key element in these policies, the new strategy plans to reduce corporate taxes from the current 35% to less than 30% within the next few years. A five-percentage-point decrease in the taxes will reduce corporations’ tax payments by 2.5 trillion yen. Even now, the tax burden on large corporations is actually far lower than the 35% due to various tax break measures. This is obvious when looking at Toyota Motors which evaded paying any corporate taxes for the past five years.
Following the consumption tax raise from 5% to 8% and the resultant price increase of goods and services, real wages in April fell by 3.4% from the same month in the previous year, the largest drop in the last twenty years. Many opinion polls showed that 70%-80% of the public say that the consumption tax increase severely affected their livelihoods. The government arrogantly dismissed this by saying that these results are within the range of its expectations. The Abe government whose growth strategy is to minimize corporate tax burdens will be unable to put the Japanese economy on a sound recovery track.
The need now is to change the economic policy to one reconstructing the economy by increasing workers’ wages and household budgets and encouraging people to spend more money.
Following is excerpts of his statement in regard to the tax system proposed in the two policies:
Regarding cuts in corporate tax rates, a key element in these policies, the new strategy plans to reduce corporate taxes from the current 35% to less than 30% within the next few years. A five-percentage-point decrease in the taxes will reduce corporations’ tax payments by 2.5 trillion yen. Even now, the tax burden on large corporations is actually far lower than the 35% due to various tax break measures. This is obvious when looking at Toyota Motors which evaded paying any corporate taxes for the past five years.
Following the consumption tax raise from 5% to 8% and the resultant price increase of goods and services, real wages in April fell by 3.4% from the same month in the previous year, the largest drop in the last twenty years. Many opinion polls showed that 70%-80% of the public say that the consumption tax increase severely affected their livelihoods. The government arrogantly dismissed this by saying that these results are within the range of its expectations. The Abe government whose growth strategy is to minimize corporate tax burdens will be unable to put the Japanese economy on a sound recovery track.
The need now is to change the economic policy to one reconstructing the economy by increasing workers’ wages and household budgets and encouraging people to spend more money.
