business

Abe's aide says Japan needs to cut corporate tax

15 Comments
By Kaori Kaneko and Sumio Ito

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15 Comments
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The rich will get richer and poor worse off than they are now. Increasing tax revenue to pay off debts, while increasing public spending to improve the economy? Something doesn't sound right.

-3 ( +1 / -4 )

Japan needs to cut the consumption tax and rein in gov't spending.

0 ( +1 / -1 )

GDP growth is the best solution for paying down the fiscal debt. Cutting corporate taxes may create more growth, which would shrink the debt.

Anyway, there isn't much of a relationship between public debt and income taxes. We still pay relatively low taxes despite the ballooning debt.

-2 ( +2 / -4 )

Encourage growth and corporate spending by reducing Corporate tax is the way to go. Companies will build bigger factorys employ more staf and become more profitble therefore helping the economy.

What they should do is heavily tax the moeny traders and the stock brokers that might take the volatility out of the markets which we be good for everyone except the greedy few who cut n run then buy back in and pump prices up only to cut n run again casuing these big swings in markets.

1 ( +2 / -1 )

We still pay relatively low taxes despite the ballooning debt.

Relatively low in comparison to where?

-1 ( +1 / -2 )

Considering Japan's corporate tax is one of the highest in the world, it's a good place to start. But until the average Sato-san on the street starts spending more cash, nobody's going to want to invest here.

0 ( +1 / -1 )

Relatively low in comparison to where?

Compared to when, is the issue. I pay around 10 percent, which is lower than it was 10 or so years ago.

There's no point worrying that the fiscal debt will raise our taxes. History shows that in most countries, there's no correlation.

The NYT reports than Americans pay much less under Obama than they every did under Reagan. European countries like the UK used to have tax rates of up to 80 to 90 percent of income. Those rates have come down drastically, including for the middle class.

-1 ( +0 / -1 )

National and municipal tax for corporates was 40.69% before March 2012.

It was reduced to 38.01% from April 2012.

It is scheduled to be further reduced to 35.64% from April 2015.

Now Abe is discussing even further reduction in corporate tax.

Personal income tax was increased by 2.1% from January 2013.

Consumption tax is planned to be increased to 8% from April 2014.

It will be further increased to 10% from October 2015.

You see why I do not support Abe.

2 ( +2 / -0 )

Yes, cutting corporate taxes is necessary. Japan's corporate tax rate is uncompetitive globally. With aging population, high inheritance taxes also do not make sense at all. Inheritance taxes should be cut to near zero; this is necessary to encourage passing down of wealth and spurring of needed spending in younger families. Cutting down government and quasi-government costs is also needed. Japan's bureaucracy is too huge; the MOF, Agri, Postal, etc bureaucracies are creating unnecessary red tapes and too huge and costly; time to slim down fast.

1 ( +1 / -0 )

I think Japan should invest more in all their small companies which often are more creatives than the big lazy corp but lack finances to grow or expand. Why is not Japan financing the first 20 employees, for 2 or 3 years, of every small companies that are already exporting/generating some income abroad ? That will be a direct and simple action to do and will help to boost jobs and commercial balance.

1 ( +2 / -1 )

JeffLeeJun. 10, 2013 - 09:29AM JST

Compared to when, is the issue. I pay around 10 percent, which is lower than it was 10 or so years ago.

Well you must be dodging some of your taxes then or are living outside Japan. If I include local government tax and health insurance taxes, with the rest, I'm paying about 20% in taxes.

I think most people in Japan are in the same boat as me, if they're paying all they should.

-3 ( +1 / -4 )

You see why I do not support Abe. Not really. Consumption and income tax is still comparatively low and corporate tax is comparatively high.

Not that comparisons with other nations are important. I believe in cultural differences. I think the fact that wives generally control family finances is a massive, massive cultural difference that influences all sorts of things such as 1) The impact of consumption vs income tax on the economy. There is a greater division between earning and so spending and taxation on the latter depresses the consumer economy far more. The fact that Japanese men are relatively weak, at least financially, has resulted in the high rates of corporate and income tax on their economic activity. 2) The way that Japanese people (do not) invest. With the greater division between earning and spending and possible tendency for women to be more risk averse, it is difficult to get them to invest in anything but low risk financial products, and with great difficulty in corporations.

-1 ( +0 / -1 )

" Abe on Wednesday pledged to boost incomes by 3% annually and set up special economic zones to attract foreign businesses in the latest tranche of measures…"

Right...promise to raise incomes 3%, steal more via income taxes, AND DOUBLE consumption tax to 10%. Any way you slice it, the people are on the losing end of the deal.

0 ( +1 / -1 )

Well you must be dodging some of your taxes

I mentioned my income taxes, national and local. My refund is roughly equivalent to my local levies, with 10% withheld tax. So, sure add the social insurance if you want. The point is, the rates are still low by historical standards, and no, the massive national debt should not be inflating anyone's tax bill.

That's not guaranteed, though. If bonehead politicians who don't know how public finance works get elected, they may make the same mistakes as "austerity Britain" and inflict unnecessary misery on us all.

0 ( +0 / -0 )

i find it hard to believe that japan's economy is worth only 500 million yen.

1 ( +1 / -0 )

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