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Asahi and Nikkei editorials stress need for boosting domestic demand

Two of Japanfs major dailies raised questions in the October 8 editorials on Prime Minister Kan Naotofs proposal to reduce corporate taxes.

One is the Asahi Shimbunfs column called gPolicy Watchh. It stated that Prime Minister Kan Naoto should again consider why the government reduces corporate taxes, and went on to state, gCorporate tax reductions will not directly contribute to creation of more job opportunities and a strengthening of international competitiveness.h

Citing the fact that about 40 percent of 11,000 companies stated that they will increase the amount of money for internal reserve funds or initiate quicker repayment of debts if the corporate tax rate is decreased, the column pointed out a positive effect of a corporate tax reduction on the economy is doubtful. In its conclusion it stated, gThe point is whether or not a corporate tax reduction will encourage companies to increase investments for economic growth and job creation as well as to raise workersf wages to improve living conditions.h

Nikkei Shimbunfs column titled, gBig opportunity, small opportunityh discusses the government policy to intervene in the exchange market as a measure to cope with the strong yen, and concludes, gOne reason why Japan became a nation highly reliant on exports is because the government implemented policies to curb the development of domestic demand. It should boost domestic demand through various measures, including social capital improvement and development of social welfare programs. The Kan administration should place importance on achieving expansion of domestic demand rather than correcting the yen appreciation.h

Both columns share a common awareness of the issue of how to make large corporations use their excessive profits to increase investments and to create more job opportunities.

- Akahata, October 9, 2010

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