In the campaigns for the Aug. 30 Lower House election, voter interest appears to be focused on domestic policies directly related to their daily lives, while issues related to diplomacy and security appear to have been put on the back burner. These issues are mentioned when Prime Minister Taro Aso attacks the Democratic Party of Japan over its fuzziness on them.
In their campaigns, parties are emphasizing matters such as social security, education, support for children, employment stabilization and help for farmers. It is understandable that people are keen about these matters because they feel anxiety about their future lives amid the economic downturn.
But the parties should not close their eyes to the possibility of having to raise taxes to fund proposed measures. They should also remember that Japan needs to carry out financial reconstruction to pay back long-term debt accrued by the central and local governments.
Total debt is expected to top ¥800 trillion at the end of fiscal 2009, reaching about 170 percent of Japan's gross domestic product — the worst among developed nations.
The DPJ proposes spending ¥16.8 trillion over the coming four years to implement policy measures such as child allowances, toll-free expressways and income compensation for farmers. It says it can free up ¥9.1 trillion by slashing waste and another ¥4.3 trillion by utilizing surpluses in special accounts, among other things.
The only step the DPJ mentions that will lead to tax increases is abolition of some special taxation measures, including married people's tax deduction, to save ¥2.7 trillion. It also says there is no need to raise the consumption tax during the next four years.
The Liberal Democratic Party has hinted at a possible hike in the consumption tax. Yet, it says it won't carry out drastic tax reform, including consumption tax reform, until the economy is back on a recovery path. Other parties oppose, or don't even mention, raising the consumption tax. If the parties choose to be deliberately ambiguous about tax increases just to get votes, they will further deepen people's distrust of politics.
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