The government should issue additional bonds to finance possible tax cuts, even if the move would bring bond flotation above the 30 trillion yen ceiling set by Prime Minister Junichiro Koizumi, the top policymaker of the ruling Liberal Democratic Party said Thursday.

“Even if the government’s bond flotation surpassed the 30 trillion yen ceiling, I think the public would understand because the economy would recover and corporate tax revenues would grow” through tax cuts, said Taro Aso, who chairs the LDP Policy Research Council.

He made the remarks in a meeting at a Tokyo hotel with representatives of a business group from Kanazawa, Ishikawa Prefecture.

The government is facing growing calls for tax cuts in fiscal 2002 to break the deflationary cycle and stimulate the economy.

Aso said the government should make tax cuts this year to activate land transactions, capital investment and boost housing demand.

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