The Democratic Party of Japan drafted an emergency economic package Friday that would let consumers deduct interest payments on mortgages, automobile loans and other loans from their taxable income.
In its so-called economic revival plan, the opposition party also calls for creation of a 2 trillion yen fund to provide job training and skills development programs for people out of work who have exhausted their unemployment benefits.
The package urges the government to allow people to deduct capital losses on their homes from their previous year’s income. It calls for a temporary moratorium on capital gains taxes.
To help small and midsize companies, the package calls on the government to exempt from corporate taxes venture firms that have been in business less than five years.
On the fiscal policy front, the DPJ said the government should compile an extra budget for the current fiscal year, with revenues to be secured by weeding out unnecessary public works projects and cutting spending for public corporations.
The package calls for a stricter assessment of loan portfolios and larger loan-loss provisions in a bid to ease banks’ bad-loan problems.
The DPJ said that in cases where banks become undercapitalized, the government should either temporarily nationalize or inject public funds into them.
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