Japanese editorial excerpts
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TOKYO, Jul. 3, 2010 (Kyodo News International) -- Selected editorial excerpts from the Japanese press:

KAN'S CONSUMPTION TAX REMARKS LACK CONSISTENCY (The Daily Yomiuri as translated from The Yomiuri Shimbun's editorial published July 3)

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.

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.

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.

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.''

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. (July 4)

 

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