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Action 31. Overhaul the Tax System. Strengthen the Country’s Fiscal Foundation through Revenue Reform
In 1990, just before the collapse of the bubble economy, Japan’s tax revenue was 60.1 trillion yen, but by 2009 it had slumped to 38.4 trillion yen. In Japan there’s an expression: “tax is the nation.” What it means is that the behavior of people and companies is heavily influenced by the tax system. In the globalized world of today, an urgent task is to transform Japan’s tax system with reference to international standards in order to ensure that economic growth benefits the national coffers.
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Jul 26 / 2016
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Action 30. Leave No Stone Unturned in Expenditure Reform – Overhaul Independent Administrative Corporations, Government Procurement, Special Budgets, and Stick the Knife into Administrative Systems
Although the key to expenditure reform is to reduce social security spending, efforts must obviously also be made to implement administrative reform in other fields. Here, we discuss expenditure reform for all the ministries and agencies in Kasumigaseki.
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Jul 25 / 2016
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Action 29. Leave No Stone Unturned in Expenditure Reform – Take a Knife to the Social Security System
The public cost of social security benefits is 31 trillion yen for the national government alone, and 42 trillion yen when the cost borne by local governments is included. In addition, the public cost of social security has been rising by one trillion yen each year. Japan allocates approximately eight times as much tax revenue to social security as it does defense, and as a result of this, it is impossible to assign enough national government funding for investment in education, in science and technology, for the children’s future, and so on. This “enemy within” is growing larger, and what is more important than anything else is to take it on squarely and begin implementing reform.
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Jul 23 / 2016
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Action 28. Build a Mechanism for Reducing Expenditure into the Government
Greece’s fiscal collapse is still fresh in the mind. For Japan, which is encumbered with debt worth more than twice its GDP, the situation in Greece cannot be shrugged off as being someone’s else’s problem. However, the cases of countries such as Sweden and Canada, which have succeeded in fiscal reconstruction without experiencing a crisis, are less well known. In both these countries, a success factor was that they worked hard to reduce social security spending and built in a mechanism for reducing expenditure. We also needs to be willing to build a mechanism for cutting expenditure into the Japanese government.
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Jul 22 / 2016
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Action 27. A Roadmap for Fiscal Reconstruction
Japan’s long-term debt has finally topped 1,000 trillion yen, which is double the country’s GDP. The finances of the Japanese national government, which were in extremely good shape right up until the collapse of the bubble economy, worsened during the “two lost decades.” Government spending swelled by 30 trillion yen while revenue shrunk by 20 trillion yen, and the government came to rely on debt to make up this shortfall of 50 trillion yen. But the solution to this problem is very simple: reduce spending by the 30-trillion-yen increase and boost revenue by the 20-trillion-yen decrease. That is the only way to fix things.
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Jul 21 / 2016
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