Reviewing past tax reforms
(From The Japan Times March 16 issue)

要約
税制改正、経済格差是正へ

At the first meeting (Feb. 24) of the government Tax Commission's expert panel to discuss tax reform, Finance Minister Naoto Kan called for a review of the tax system dating back to the 1980s. Apparently, Mr. Kan thinks that past reforms of the tax system have weakened the state's ability to collect and redistribute funds, leading to a wider economic gap between rich and poor.

In fiscal 2010, the government's tax revenues will amount to some ¥37 trillion, covering only about 40 percent of the budget. Bonds worth ¥44 trillion — a record amount — have to be issued. It is inevitable that the government will consider raising some taxes, but so far discussion has inclined too far toward the inequitable measure of raising the consumption tax.

A 1-percentage point rise in the consumption tax rate brings in ¥2.5 trillion a year, but it would weigh more heavily on low incomes. There must be a more equitable way to secure sufficient revenue. If it is determined to raise the consumption tax rate, the panel should look into lowering or maintaining the rate for groceries and other daily necessities.

Past reforms have often favored the rich. The income tax rate for the top bracket has been lowered from 75 percent to the current 40 percent. Inheritance tax, helpful for wealth redistribution, is imposed in only 4 percent of cases. The tax advantages assorciated with income gained from stock dividends and capital gains also help the rich.

It appears the time has come to reassert the principle of a progressive tax rate on personal income, reducing the scope for deductions and other advantages that favor the wealthy.

Among other tax reform issues, private firms are calling for a cut in corporate tax. In discussing its plans, the panel should look at both the corporate tax rate and the corporate sector's contribution to social insurance.

As for the government's plan to assign identification numbers to taxpayers, care must be taken. Such a system could deprive people of their autonomy as taxpayers and lead to an increase in the government's overall control over society.

菅財務相は政府税制調査会で、1980年代にさかのぼって税制を見直すよう求めた。過去の税制改革が所得再配分の機能を弱め、経済格差を生んだと菅氏は考えているようだ。

増税検討は妥当だが、議論は社会保障財源としての消費税引き上げに偏っている。調査会は平等な税収確保の方法を検討すべきだ。富裕層の所得税率は75 % から40 % に下げられるなど、過去の改革は富裕層に有利なものだった。相続税は相続件数の4％にしか課されない。

富裕層への優遇税制を弱め、累進課税を強化させるときだ。法人税を削減するよう企業は求めているが、企業の社会保険料負担と込みで考えるべきだ。

政府が検討している納税者番号制度導入は、納税者の自主性を奪い、政府による管理社会につながらないよう配慮すべきだ。