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Noda’s plan to increase sales tax

by Michael Hoffman

Special To The Japan Times

There’s no such thing as a popular tax increase. Woe betide the leader who sees no other way out of a fiscal impasse.

Such is Prime Minister Yoshihiko Noda’s unenviable plight. A kōreika shakai (高齢化社会, aging society) like Japan’s must fund its swelling shakai hoshōhi (社会保障費, social welfare costs) — to say nothing of Tohoku reconstruction — somehow.

Whether a shōhizei zōzei (消費税増税, consumption tax increase) is or is not the best way to go is a question best left to experts (or maybe not, given their disagreements among themselves). The point is that Noda has made up his mind and must now convince a discouraged and suspicious nation. This is not proving easy.

In late February he was reportedly (though both parties denied it) in gokuhi kaidan (極秘会談, top-secret talks) with opposition leader Sadakazu Tanigaki to dashin suru (打診する, sound him out) on a dairenritsu (大連立, grand coalition) uniting Noda’s governing Minshuto (民主党, Democratic Party of Japan, DPJ) and Tanigaki’s Jiminto (自民党, Liberal Democratic Party, LDP). That meeting, if it occurred, is not considered to have gone well, but it was a prologue to a flurry of closed-door negotiations, notably one session in early March involving 民主党 vice-president Katsuya Okada and a senior 自民党 executive. A few days later, Okada told the press, “Dare to itsu atta to ka, dō iu hanashi wo shita to ka, mattaku iwanai koto ni shite iru” (「誰といつ会ったとか、どういう話をしたとか、全く言わないことにしている」”Who I met, when I met them, what we talked about, I am absolutely not saying”). His curt attitude is a measure of the issue’s sensitivity.

He did, however, offer this elaboration: “Jiminto ga Minshuto wo hihan shi, Minshuto ga hanron suru seiji wo kokumin wa motomete inai” (「自民党が民主党を批判し、民主党が反論する政治を国民は求めていない」”The people will not want politics in which the Jiminto criticizes the Minshuto and the Minshuto refutes the Jiminto”). Preferable to that, he said, is “tagai ni yuzuriatte gōi ni tassuru seiji” (「互いに譲り合って合意に達する政治」 “politics of compromise resulting in agreement”).

Yes, but the 自民党 is not biting. Kaisan ga saki da (解散がさきだ, dissolution first), it demands — meaning dissolution of the Lower House followed by a sōsenkyo (総戦挙, general election). A sōki kaisan (早期解散, early dissolution) is anathema to the 民主党, which can hardly face the prospect with optimism.

It’s not a policy dispute — the 消費税増税 was in fact originally the Jiminto’s idea. What the Jiminto says is, “Zōzei wa Minshuto no manifesto ihan” (「増税は民衆党のマニフェスト違反 」”a tax increase goes against the Minshuto’s election platform”) — a reference to the Minshuto’s promise in its victorious 2009 election campaign not to raise taxes. The impasse continues.

Nor is it simply 民主党 vs. 自民党. Noda faces determined opposition within his own party. This is more likely to intensify than diminish following last week’s abrupt party endorsement, in the face of unappeased objections and resentment, of a zozei hōan (増税法案, tax increase bill) to be deliberated in the Diet. “Shūtaisei no jiki datta (集大成の時期だった, Time to wrap things up,”) Noda told a press conference.

Proponents of 増税, pointing to the daunting expenses Japan faces and the massive indebtedness which infects it even now, say, “Kono mama da to Girisha ya Supein no yō ni shakkin de tsuburete shimau” (「このままだとギリシヤやスペインのように借金でつぶれてしまう」”At this rate Japan will be crushed by debt like Greece and Spain”). Opponents, such as 民主党 Lower House representative Eiko Okamoto, retort, “Defure no taimingu de shōhi zōzei wa kanari kibishii. Keiki ga ochikomu” (「デフレのタイミングで消費増税はかなり厳しい。景気が落ち込む」 “A consumption tax increase in a time of deflation is rather severe. It will depress the economy”). Takaaki Koga, also a Minshuto Lower House member, referred to his party’s election promise not to raise taxes and said bluntly, “Minasan ni usotsuki to iwaretakunai” (「皆さんにうそつきといわれたくない」”I don’t want people to call me a liar”).

民主党 ranks are no less fractious regarding the grand coalition. Some like the idea, others don’t. Hirohisa Fujii, chairman of the DPJ Tax Commission, considers it at least preferable to the current heisokuteki na seiji jōsei (閉塞的な政治情勢, political impasse). But Yasuo Ichikawa, secretary-general of the DPJ caucus in the (upper) House of Counselors, said, “Kihonteki ni dairenritsu wa hantai” (「基本的に大連立は反対」 “I’m fundamentally against a grand coalition”). If that’s how things end up, Nan no tame ni seiken kōtai shita no ka wakaranai (何のために政権交代したのかわからない, What was the point of the DPJ taking over from the LDP?).