While Prime Minister Junichiro Koizumi is gearing up for tax cuts he hopes will boost the fragile economy, the head of his advisory panel is not shy about expressing skepticism about their effectiveness.
Because of the modest size of the proposed tax cuts, along with the knowledge that hikes to other taxes will follow, taxpayers will probably repay debts or pad their savings with money from the cuts instead of spending and investing more, according to Hiromitsu Ishi, head of the Tax Commission.
"I don't believe tax cuts are a very effective way to (stimulate) the country's economy," said Ishi, president of Hitotsubashi University. "The method of relying on tax cuts has almost reached its limits."