For the market economy to function effectively, equal opportunity must be guaranteed in all sectors of society. In today's Japan, however, there is no such guarantee. For example, the opportunity for a Japanese person to become a Diet member is far from equal, because many retiring Diet members have their son or daughter take over their constituency. Many company owners prefer to have their offspring take over the business after they retire. Students of private high schools, with higher scholastic standards, have a better chance of passing college entrance examinations than do students of public high schools.
Uneven income distribution, stemming in part from unequal opportunity, should be ameliorated by progressive taxation. Where unequal opportunity is deemed unfair and equal opportunity is considered unfeasible, progressive taxation is essential for a fair society. This is basically the theory of U.S. economist John Kenneth Galbraith.
Most Japanese economists, however, believe in market fundamentalism and argue that income tax rates should be less progressive.