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The ruling coalition’s tax reform proposals for fiscal 2008 are apparently aimed at getting votes in coming general elections. They fail to address long-term issues such as how to divide tax-revenue sources equitably between the central and local governments and how to overhaul the tax system to reconstruct finances.

Lawmakers of the Liberal Democratic Party and Komeito believe that their parties suffered the stunning defeat in the July 29 Upper House election because of a revolt by rural voters who felt that the government did not pay enough attention to their regions with economic management measaures.

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