The main opposition Constitutional Democratic Party of Japan (CDP) will pledge to increase taxes on rich individuals and large companies while easing the burden on lower- and middle-income households in its campaign platform for the general election this month, party sources have said.
According to the sources, the CDP will call for a temporary lowering of the consumption tax from the current 10% to 5% and will effectively exempt people who earn less than around ¥10 million annually from paying income tax.
The party apparently aims to one-up Prime Minister Fumio Kishida, whose vows to reduce wealth disparity are in question after he walked back plans to review Japan’s capital gains tax.
The CDP’s campaign platform will claim that Abenomics, the policy mix implemented by the former Prime Minister Shinzo Abe and his successor Yoshihide Suga, has caused the gap between the rich and the rest of the population to widen.
In a bid to revive the coronavirus-hit economy and help the most vulnerable, the opposition party will promise to draw up a supplementary budget worth more than ¥30 trillion and give cash handouts of ¥120,000 to low-income individuals.
The CDP, led by Yukio Edano who served as chief Cabinet secretary when the CDP’s forerunner party was in power, expects to boost tax revenue by about ¥10 trillion in total by, among other things, changing the corporate tax into a progressive tax system and by raising the ceiling for income tax on rich individuals, according to a senior party official.
Kishida has said he will dissolve the House of Representatives, the powerful lower chamber of the Diet, on Thursday for a general election on Oct. 31, with a victory for his Liberal Democratic Party and junior coalition partner Komeito expected to give him a mandate to implement a large stimulus package to continue to deal with the pandemic-hit economy.
Regarding the capital gains tax, Kishida had suggested that he was considering a review of the current flat rate of 20% but backpedaled on Sunday after the comments sent share prices falling, saying there were “widespread misperceptions” that the change would happen immediately.
The CDP looks to raise the capital gains tax to 25% by fiscal 2023 in principle and eventually lift it to 30%, Edano said in the Diet Monday.
The Japanese Communist Party (JCP), which the same day unveiled its own campaign platform, vowed to give cash handouts of ¥100,000 to middle-income households and raise the minimum wage, currently averaging at ¥930, to ¥1,500 per hour. Like the CDP, the JCP looks to lower the consumption tax to 5%.
Both the CDP and the JCP, along with other left-leaning opposition parties, are looking to consolidate candidates in competitive constituencies to snatch away seats from the ruling coalition in order to achieve stated goals such as legally recognizing same-sex marriage and giving married couples the option to use separate surnames.
The LDP currently holds 276 of 465 Lower House seats, while Komeito has 29. The CDP controls 112 seats and the JCP has 12.
The CDP’s campaign platform is also set to include realizing carbon neutrality without relying on nuclear power. The JCP pledged to cut greenhouse gas emissions from fiscal year 2010 levels by 50-60% by fiscal year 2030 and have Japan join the nuclear weapon ban treaty.
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