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Friday, April 6, 2012
Consumption tax tizzy
The March 30 submission to the Diet by the Noda Cabinet of a bill to raise the consumption tax from April 2014 has led some lawmakers of the ruling bloc to express their opposition to the bill. On March 29, Mr. Shizuka Kamei, head of the New People's Party, a minor party forming a coalition with the Democratic Party of Japan, announced his party's withdrawal from the ruling coalition. His move could have some repercussions, though most NPP lawmakers opposed his move.
In the DPJ, more than 30 lawmakers close to former DPJ leader Ichiro Ozawa, who strongly opposes the tax hike plan, tendered their resignation from government or party posts. The development means that Mr. Noda will have difficulty passing the bill through the Diet. But the Liberal Democratic Party, which called for a consumption tax raise in the July 2010 Upper House election, and Komeito may eventually cooperate with the Noda administration and the DPJ leadership over the bill in the Diet.
Mr. Noda has been saying that he will stake his political life on the consumption tax increase. But he must ask himself whether it is right to just concentrate on a tax increase while failing to pay enough attention to sufficiently meet the needs of the people affected by the 3/11 triple disasters. He also must consider whether the government's idea of using revenues from the consumption tax — a regressive tax — to pay social welfare costs is reasonable when using revenues from taxes on the richer segment of society to support the weaker segment of society is the normal approach. The government's approach would also introduce unnecessary rigidity to the use of government money.
On March 30, health and welfare senior vice minister Yoshio Maki, internal affairs and communications senior vice minister Toru Kikawada, education senior vice minister Yuko Mori and internal affairs and communications senior secretary Ryo Shuhama tendered their resignations from their posts. By April 2, 29 other DPJ lawmakers also tendered resignation from their party posts. Mr. Takatane Kiuchi, a DPJ Lower House member, announced his departure from the party.
Mr. Ozawa hopes to use these moves to try to corner the Noda administration. But his group has been unsuccessful in recruiting sympathizers from among DPJ lawmakers of non-Ozawa groups. Its success depends on whether it can present a reasonable and convincing argument to explain its cause.