Japan Press Weekly

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2013 September 25 - October 1 [POLITICS]

Local papers say Abe’ economic policy is overly partial to business interests

Local newspapers in their editorials are criticizing as being excessively pro-business Prime Minister Abe Shinzo’s plan to offer tax cuts to corporations while imposing a consumption tax hike on the general public.

Under the pretext of preventing the economy from being damaged by the consumption tax increase slated for April next year, PM Abe is planning to abolish the special corporate tax designated for reconstruction from the 2011 disaster one year earlier than initially scheduled.

The Kobe Shimbun editorial on September 25 pointed out that most of measures in preparation for the consumption tax hike are ones in favor of corporations, such as abolition of the special corporate tax, expansion of public works projects, and tax cuts on investment spending. Support measures for households “are far less than those for corporations”, it stated.

The Shinano Mainichi Shimbun on September 21 said that companies will pay 900 billion yen less in taxes a year thanks to the abolition of the special tax for disaster recovery. “Why does the government favor corporations over households which will directly suffer from the consumption tax hike?,” the editorial questioned.

The Kochi Shimbun dated on September 22 criticized the government policy, saying, “It is completely out of balance.”

Other newspaper editorials raised questions concerning Abe’s assertion that the termination of the corporate tax hike will eventually lead to an increase in jobs and wages.

The Hokkaido Shimbun on September 25 said that as 70% of companies in Japan do not pay corporate taxes because they are not in the black, the planned tax breaks will not benefit these companies and therefore not lead to wage increases.

The Okinawa Times on September 26 pointed out that even if a company gets a tax cut, it will not mean that the company will use the money that would have been used to pay taxes to increase wages. “It cannot deny the possibility that the tax cut will result in an increase in corporate internal reserves,” the editorial stated.