消費税引き上げ 首相発言には一貫性が必要だ

The Yomiuri Shimbun (Jul. 4, 2010)
Kan's consumption tax remarks lack consistency
消費税引き上げ 首相発言には一貫性が必要だ(7月3日付・読売社説)

Prime Minister Naoto Kan's remarks on a possible hike in the consumption tax rate have been inconsistent, and some in the Democratic Party of Japan have openly criticized his wavering stance.

This is bound to leave voters confused. The prime minister and the DPJ should clarify the party's views on the consumption tax and present them to the public.

The prime minister initially said that considering raising the consumption tax rate to 10 percent was a campaign pledge. Later, however, Kan changed his stance, saying the pledge only went as far as calling for suprapartisan discussions on the issue.

Because a consumption tax is regressive by nature, the prime minister also proposed the introduction of a refund system for people with low incomes, as they bear a heavier burden than higher earners in terms of the tax-to-income ratio.


Who gets tax relief?

But regarding the income levels of households to be eligible for such a refund system, the prime minister has been inconsistent, referring to levels as low as 2 million yen and as high as 4 million yen.

Households with an annual income of less than 4 million yen account for nearly half of the national total. If refunds are given to such a wide range of taxpayers, the intended revenue boost from a tax hike would be lost. It also would undermine the fair distribution of tax burdens.

Chief Cabinet Secretary Yoshito Sengoku said Kan was simply offering a basis for discussions on the issue. But we consider the prime minister's words to have grave importance. It is detrimental if the prime minister carelessly refers to figures that are not backed up by sufficient discussion.

In the first place, Kan has yet to present a clear overall vision for tax system reform. He must clarify such basic matters as why the consumption tax rate should be raised from the current 5 percent to 10 percent and for what purpose the increased tax revenues would be used.

Critics in opposition parties have said that the DPJ's handout programs, if continued, would eat up the new revenue. Kan needs to provide a clear response on this point, too.


DPJ must put house in order

The discord seen within the DPJ is an even more serious problem that cannot be overlooked.

Former DPJ Secretary General Ichiro Ozawa has openly criticized the stance of current party executives, saying: "[The party] pledged not to raise the consumption tax rate for four years during the House of Representatives election last year. That pledge should be kept."

As the party in power, the DPJ must not leave intraparty discord unresolved regarding tax and fiscal issues that concern the very foundation of the nation.

A hike in the consumption tax rate is an issue that successive administrations have avoided tackling. More than a few voters praised Kan when he put a tax increase on the table out of concern about social security revenues and worsening fiscal conditions, and asked the public to share the burden.

But if such a prime minister begins to equivocate, questions could be raised about how resolute he is in seeking to raise the consumption tax rate.

In the House of Councillors election in 1998, then Prime Minister Ryutaro Hashimoto flip-flopped on the issue of permanent tax cuts. That triggered voters' distrust and led the Liberal Democratic Party to a humiliating defeat.

A prime minister must be consistent in his or her remarks.

(From The Yomiuri Shimbun, July 3, 2010)
(2010年7月3日01時09分 読売新聞)

by kiyoshimat | 2010-07-04 07:10 | 英字新聞

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