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Irrational way of shifting tax burdens onto salaried workers
Akahata editorial (excerpts)

A plan to shift more tax burdens on salaried people has caused great repercussions. The plan was proposed recently by the Government Tax Commission, an advisory body to the prime minister.

The tax panel report called for the fixed-rate tax cuts for salaried workers to be abolished in 2006. The added burden on household budgets in 2005 and 2006 as a result of this measure will be about 3.3 trillion yen. The Commission also calls for deductions from taxable income to be fully reviewed and phased out.

Income tax in Japan is levied according to payers' capacity to pay. If taxes like the consumption tax are imposed in disregard of people's earnings, it will force lower income earners as well as those who are suffering hardships to shoulder heavier burdens.

If deductions for salary earners are cut by half, it will mean a 5-trillion yen increase. The Japan Research Institute estimates that if such deductions and the abolition of the fixed-rate tax cuts are enforced at the same time, the total amount of increase in salaried workers' burdens will be more than 10 trillion yen.

A family of four with a yearly income of 5 million yen in wages will have to pay 420,000 yen more in tax, which is about the same as the monthly salary.

In sharp contrast, the government Tax Commission calls for continuing tax breaks for wealthy people and large companies.

Japan is one of the major countries with high poverty rates. The gulf between rich and poor is widening. There is an increase in the number of people who have difficulty in maintaining their living standards. More than 30,000 people a year kill themselves for some reason, often including financial difficulties.

The proposed massive tax increase is cruel and irrational and will exacerbate the social divide. - Akahata, June 27, 2005

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