2006budget

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End policy that widens social gap: FY 2006 budget passes Lower House
Akahata editorial (excerpts)

The 79.69 trillion yen FY 2006 budget on March 2 passed through the House of Representatives by the majority vote of the ruling Liberal Democratic and Komei parties.

Ignoring falling personal incomes and the widening gap between the rich and the poor, the Koizumi Cabinet has proposed abolishing fixed-rate income and residential tax breaks that will mean forcing salaried workers to pay 3.4 trillion yen more in taxes. The new budget, if enacted, will force the public to shoulder a heavier burden of costs for medical, welfare, and other social services.

In contrast, the budget is very generous to major corporations that are making record profits. It will keep corporate tax cuts that started in the same year as the fixed-rate tax cuts. It will also give big corporations tax breaks on R&D as well as IT-related investments.

The Koizumi Cabinet argues that the public should agree to pay more in taxes "because the nation's finance is in difficulty." If that is the case, the cabinet must first stop promoting unnecessary major public construction projects such as the completion of financially unsustainable expressways, the second phase of the Kansai International Airport, major hub ports, and huge dams.

If Koizumi sticks to the upside-down policy of reducing taxes on sectors making record profits while increasing taxes on households despite shrinking incomes, it cannot reconstruct the national finances.

For five years, the Koizumi Cabinet has compiled budgets that push ahead with the "structural reform" policy calling for people to pay more while giving large corporations and the wealthy tax breaks. It has added 170 trillion yen to the national debt.

Justifying its pro-business policy, the Koizumi Cabinet argues that major corporations need to increase international competitiveness. However, Japan's exports in 2005 reached 72 trillion yen, suggesting that the major corporations already have their competitive edge.

Look at Japanese corporations' share of the tax burden and costs for social services. In a comparison of the ratio of their payment to GDP, they pay only 50-80 percent of what corporations are shouldering in European countries. It is important for Japan to end the pro-business tax policy and raise the tax burden on major corporations to the same level as in EU countries.

State finance exists in order to help the public solve problems to remove anxieties about living conditions and ensure social stability. The task now is to end the Koizumi Cabinet's "structural reform" policy that only widens the social gap and poverty.
- Akahata, March 3, 2006