Lawmakers blasted the government's tax hike proposal at a general meeting of the ruling Democratic Party of Japan's tax commission on Sept. 21, saying the economy is still too frail for such a measure.
Lawmakers blasted the government's tax hike proposal at a general meeting of the ruling Democratic Party of Japan's tax commission on Sept. 21, saying the economy is still too frail for such a measure.
Of the 15 lawmakers who spoke up at the meeting, only one came out in favor of the tax hikes proposed by the government's Tax Commission to fund rebuilding in the disaster-hit Tohoku region.
Despite the strong opposition, DPJ executives will try to win over the party members by reducing the scale of the tax hike proposal and delaying the timing of the actual tax increase.
Hirohisa Fujii, chairman of the DPJ tax commission, stressed that the meeting was for decision-making, not a study session.
But his words were not taken to heart by many DPJ lawmakers who attended.
"I cannot believe that we are even discussing tax hikes," Lower House member Hiroshi Kawauchi said. "We cannot have a tax hike as long as we still face deflation, a strong yen and no sign in the long term of a positive nominal economic growth rate."
Lower House member Kei Otani said: "I am not opposing a tax hike because we would lose in the election. Having politicians take the lead in policy decisions means assuming responsibility for the results by seriously explaining that the Japanese economy will be all right even with a tax hike."
With so much opposition, Shinichiro Furumoto, secretary-general of the DPJ's tax commission, was forced to end the meeting by saying: "We have to enter discussions about (the contents) of the taxes. We want to continue with discussions tomorrow."
DPJ executives want to reach a conclusion soon because they still have to enter discussions with the other parties.
Executives want to submit, as early as mid-October, legislation for the tax hikes to pay for the rebuilding process at the same time as the third supplementary budget.
At the Sept. 21 meeting, Mitsuo Mitani, a finance parliamentary secretary, said, "There is a need to conclude discussions with the other parties by the end of September."
Despite the lawmakers' opposition to tax hikes, their momentum is limited because Prime Minister Yoshihiko Noda, who won the DPJ presidential election in late August, is a strong proponent of tax hikes.
Even a younger DPJ lawmaker close to party power broker Ichiro Ozawa said: "I am opposed to tax hikes. We will lose the next election. However, now is not the time to fight. With calls for greater party unity, today's tax commission meeting was not the battlefield."
DPJ Secretary-General Azuma Koshiishi indicated that he wanted the party to reach a decision by the end of this month.
At a separate meeting on Sept. 21 of the DPJ Policy Research Committee that discussed the contents of the third supplementary budget, a proposal was presented to shrink the tax hike amount by finding additional nontax revenues as well as spacing out the timing of the tax hikes to gain the understanding of DPJ lawmakers opposed to higher taxes.