EDITORIAL: 25-year period for higher taxes is far too long
As part of the government's limited-time tax hike plans to finance post-Great East Japan Earthquake recovery efforts, the Democratic Party of Japan, the Liberal Democratic Party and New Komeito have agreed on 25 years as the period during which a higher income tax rate will remain in effect.
The government and the ruling DPJ initially eyed a 10-year limit.
But they extended the period to 15 years per New Komeito's proposal, and then added another 10 years at the LDP's insistence.
The revenues from the higher taxes will underwrite post-disaster reconstruction bonds, which will be issued to secure funding for immediate reconstruction needs.
Financially, Japan is among the worst-off nations in the developed world.
Japan's outstanding debt is projected to top 1,000 trillion yen, which is more than double its gross domestic product.
In that sense, the three parties have fulfilled their responsibility to some degree by securing tax revenues to finance reconstruction projects.
However, 25 years is far too long.
Even though stretching the period would lighten taxpayers' annual burden, we must point out that the purpose of the temporary tax hike was to avoid burdening the future generations.
A quarter-century is obviously shorter than the redemption period of 60 years for construction bonds, but it is still long enough to affect people who aren't even born yet.
One thing that bothers us is the attitude of the ruling and opposition parties alike toward the proposed tax hike. 心配なのは、増税に対する与野党の姿勢だ。
From their exchanges, we sensed their strong reluctance to make any decision that would demand sacrifices from taxpayers.
This past summer, the government and the ruling DPJ came up with plans to implement the integrated reform of the social security and taxation systems.
Under the plans, consumption tax revenues were earmarked for social security payments, and the consumption tax rate was to be gradually raised to 10 percent by the middle of this decade.
The government and the DPJ intend to present the bill to the Diet during the regular session next year, and will decide on the timing and size of each tax increase by the end of this year.
However, there is considerable opposition to the proposed tax hike within the DPJ itself.
Many DPJ legislators are relative newcomers to politics, and we presume they are worried that supporting the consumption tax hike may cost them the next election.
The biggest drain on the national coffers is the growing social security outlay due to the aging of the population. 国の財政を圧迫している最大の原因は、高齢化に伴う社会保障費の増加だ。
Unlike the construction of roads and bridges that can be funded with construction bond revenues, social security payments must be made for the present generation.
It is simply not right to keep running up debts and stick the tab to the future generations.
In fact, we have gone too far already, and the debt crisis of Europe is no longer someone else's problem.
We also must remind the opposition LDP and New Komeito that when the income tax law was revised in 2009, they were the ones who authored the supplementary provision that says, "In order to radically reform the tax system, including the consumption tax, necessary legislative steps must be taken by fiscal 2011."
Moreover, the LDP pledged to "set the consumption tax rate at 10 percent for the time being and appropriate the entire tax revenues to social security needs" during the Upper House election campaign last year.
We certainly cannot let the LDP forget this.
Both the ruling and opposition parties must face the fact that avoiding tax hike talks is no way to stop the nation's fiscal problems from spinning out of control.