Japanese Politics around Tax Increase
Now Prime Minister of Japan Mr. Yoshihiko Noda is fully gearing up for increase in the consumption tax rate, namely from 5% to 10%.
As fiscal deficits of the Japanese Government have reached 200% of Japan's GDP, many parties concerned expect that the Japanese Government will collect more tax to cover the deficits. However, it looks superficial. There are many conditions and complicated backgrounds for this situation. Some economists claim that there is no need at all to increase tax. Japan has sufficient assets domestically and overseas. The point is economic growth, they argue. Or the true agenda must be deflation but not fiscal deficits, they assert.
From the beginning, performance and behaviors of the Ministry of Finance and the Bank of Japan are highly biased. Tax increase is very advantageous for them. With an increase of tax revenues realized so easily, they will not have to make full efforts to fix financial problems and address economic challenges. In other word, a tax increase is a very easy way for bureaucrats to get money which will eventually make them rich.
Nonetheless, it is thought that it would be impossible for PM Mr. Noda to get full support for his tax increase policy from the ruling party DPJ. One of leading politicians of the DPJ, Mr. Ichiro Ozawa, is strongly against raising a tax rate at the present time. Among 290 Lower-House lawmakers of the DPJ, 80 reportedly belong to the Ozawa faction. Among these 80 lawmakers, if 60 should vote against the consumption-tax rate increase bill, PM Mr. Node will lose. So, the DPJ is faced with a crisis of a split in the party.
On the other hand, the conservative opposition party LDP also adopts a policy to increase tax. But more than that, the LDP wants to come back to power which they lost in the summer of 2009 after their monopoly of power that had continued almost half a century. So, it is reported that the LDP requests the head of the DPJ, namely PM Mr. Noda, to hold a snap election soon in exchange of their support for the tax increase bill PM Mr. Noda is proposing, But how foolish PM. Mr. Noda looks if he accepts the counter-proposal, since results of any polls show that PM Mr. Noda and the DPJ will surely loose the election. It is highly expected that a regime change will occur again through the next general election. And, in the history of the Japanese politics, a ruling party always suffered a poor outcome from a national election held after the party increased tax. Accordingly, the capitalist LDP wants the socialistic DPJ to raise the tax rate before the LDP seize power.
Anyway, it is Japanese voters that decide the case.
Ichiro Ozawa, a national lawmaker of Japan since 1969
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Mat 6:1 Take heed that ye do not your alms before men, to be seen of them: otherwise ye have no reward of your Father which is in heaven.