By TAKURO CHIBA/ Staff Writer
October 27, 2023 at 14:36 JST
Prime Minister Fumio Kishida addresses an Oct. 26 meeting of government and ruling coalition officials. (Koichi Ueda)
The ruling Liberal Democratic Party’s Research Commission on the Tax System once wielded such enormous influence it often did not even heed the concerns raised by the prime minister of the time.
But now, the commission is facing an existential crisis.
Revisions were made to the tax panel because it gave the image that the LDP was controlled by a few elderly lawmakers who made decisions behind closed doors.
Moreover, power became concentrated within the prime minister’s office during Shinzo Abe’s long reign. Prime Minister Fumio Kishida has picked up the baton.
On Oct. 26, Kishida gave instructions to ruling coalition officials concerning tax cuts for next year, including the amount to be cut.
Previously, such details were left up to the tax system research commission.
However, with the specific proposals given by Kishida, one high-ranking LDP official said: “The prime minister’s office alone has decided on the tax cut contents. Why do we need the research commission?”
Kishida may have given the detailed instructions to prop up his Cabinet’s falling support ratings and to soften criticism that he will seek major tax increases, especially to cover defense spending and his child-care policy.
A high-ranking member of the LDP tax research commission said Kishida was too concerned about his public image.
The prime minister has also been selective about the data he uses in calling for tax cut measures.
Kishida said the tax cut would be one way to return to taxpayers the combined increase over two years of about 3.5 trillion yen ($23 billion) in personal income tax revenues.
But he made no mention of the large expenditures over that period that greatly exceed the revenues.
The government is still dependent on issuing bonds to pay for a substantial portion of its programs, meaning it can do little to address its woeful fiscal situation, one of the worst in the world.
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