Press translations [Japan]. Economic Series 0223, 1946-01-28.

Summary:

Taking advantage of this occasion, I would like to express my own views on comments made by various circles in connection with the new property taxes. People say that the exemption rate per capita and the basic exemption level are too low and the proposed property taxes are nothing but taxes on the masses. To this, I would like to point out that for salaried men or wage earners who do not have land or houses, their deposits, national bonds, and the paid up amount of insurance fees will be the main objects for taxation, since furniture, cooking utensils, and clothing are exempt from taxation.

The main object of the proposed taxes is, as the Minister of Finance pointed out in his statement, the stabilization of the national economy by the restoration of the favorable balance between goods and money. In view of this objective, the property taxes must be very drastic, otherwise they will be ineffective in preventing inflation. From this point, I think it is necessary to draw up a kind of balance sheet on the national economy in order to ascertain how much revenue will be essential for the recovery of national economic stability, and the total amount of the nation's property, as well as the present distribution of property among the Nation. The exemption rate per capita, the basic exemption level, and the rate of taxation should be decided after these elements have been taken into consideration. On the other hand the exact amount of revenue which the Government needs cannot be foretold because reparations and other similar important matters have not been settled yet. In this connection, the Government estimates tentatively the revenue required through enactment of the new tax low at 100 billion yen. The exemption per capita and the exemption level announced by the Government recently are worked out after figuring out the estimated amount of the Nation's properties and the distribution of these properties.

Some people advocate setting the exemption level at 150,000 yen, but they do not reveal how much revenue they can collect by enforcing this as a basis. Of course, if it is possible to collect the essential amount of money by adopting the high tax-exemption limit, it would be much better to have the limit high. However, the amount of property owned by the lower classes is larger than other classes at present.

Another problem is one concerning the appraisal of properties. The draft bill provided that the appraisal should be made at the current prices, but it would be most difficult to decide the exact prices, since prices of commodities so conspicuously differ at present. Concrete policies will be made after obtaining the approval of the Property Tax Appraisal Commission and similar committees. Compared with the awful black market prices now current, the amount of 20,000 or 30,000 yen will be small. Nevertheless, it is not proper to carry

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out the new taxation, which is comparable to a final settlement of accounts on such an evaluation basis. In my opinion, a proper evaluation basis should be taken in anticipation of the future stable economic condition of JAPAN. On this basis, most of the farming households below the middle class will be exempt from the property tax. Though I cannot give the definite number of taxable household when the date of the property investigation has not yet been fixed, it is generally believed that those taxable households will be only around 15 per cent of the total of 15 million households.

Some people oppose the utilization of the tax revenue for redemption of national bonds. They say that such a step would merely protect banking organizations. Yes, most of the national bonds are possessed by such organizations, but they are, so to say, the collateral of deposits made by the general public. Therefore, if such bonds should be repudiated, the losses will hit the masses directly.

The adequate and fair sharing of responsibilities in the postwar situation according to individual capacity is the objective of the three new taxes. To repudiate bonds on one hand and to collect taxes on the other is itself a self-confutation. When banking organizations collapse as a result of the repudiation of bonds, and only the masses are paid from among the depositors, there will be left very few who are liable to pay such taxes. If people say that 100 billion yen is not enough, measures to increase revenue should be taken. If banking organizations have to assume much greater responsibilities, heavier taxes should be levied upon such organs.

Some say that a portion of the tax revenue should be used for social welfare enterprises. Of course, I agree, but for such expenditures it is advisable to save on other expenditures or increase the ordinary tax rate. What the Nation eagerly desires is the prevention of inflation, the stability of the prices of commodities, consequently adjustment of their daily life. This is the first objective of the new taxes. Therefore, if part of the property tax revenue is used for other purposes, the objective of the new taxes will lose its significance, and I am afraid that it would load to the aggravation of inflation.

The report prepared by the Colvin Committee in ENGLAND in 1927 stated that the success or failure of property tax depends on whether or not the Nation supports it. It is true in the case of JAPAN, when she is on the verge of inflation or the enactment of the property tax. Those who are exempted from such taxation cannot be indifferent for they are not excluded from being bit by inflation. In this connection I would like to ask the whole Nation to co-operate with the Government for the reconstruction of national economy. In conclusion, I would like to ask the tax payers not to tempt revenue officials, for most of them are not well paid, and there are many possibilities of their being tempted by those who seek to evade taxes. If tax payers and revenue officials are indignant in reading the above paragraph, I am very pleased, for these people are reliable.

Full Translation:

According to an investigation made by the prefectural authorities of NAGANO, at the end of December, throughout each city, town, village and employment office, the total number of unemployed in that pre-

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ITEM: 2 (Continued)

fecture was revealed as 69,291 - 50,333 men and 13,953 women. Since the war, the number of people seeking employment, checked at each employment office, totalled 17,107 - 10,994 men and 6,113 women. This figure, however, is only 20 per cent of the total number of unemployed.

With regard to women alone, the number seeking employment is the largest ever known in that prefecture. This phenomenon seems largely due to the fact that women intend to better their position in society. Another reason is that employers tend to welcome women rather than men by reason of their fear of disputes.

The remainder of the unemployed, 80 per cent of the total, are either able to support themselves or have turned to black marketing. On the other hand the number of vacancies at the end of December, was nearly half the number of unemployed, namely, 30,966 - l4,984 for men and l5,982 for women. In the industrial field, the offers for women are in the overwhelming majority. The actual situation in each type of work is as follows: offers from outside the prefecture were less than ten per cent of the whole. Generally, the majority came from machine tool and electric instrument factories. Those from cotton-spinning and silk-reeling industries were fewer.

Prefectural authorities said that since industrialists have, at present, little hope of profits and are living off their capital, they prefer to employ women because they will accept lower wages.

Full Translation:

The Ministry of Finance announced the amount of occupational expenses for Allied Forces covering the past four months, September to the end of December 1945. According to this, the total expenses in that period were 701,192,353 Yen. This figure is surprising considering the three billion Yen for three months which was expected by the Government at the beginning of the occupation.

The detailed items for expenses are as follows; (1) Amount used out of the funds amounting to 1,100,000,000 Yen delivered to General Headquarters was 450,222,012 Yen; (2) 250,970,341 Yen which was paid by the Government for Allied Forces expenses was expended for necessary equipment, etc.

The majority of this expenditure was used for the wages of day laborers. The remainder were expenses for the pay of regular employes and laborers, essential materials used for equipment, repair and maintenance of buildings, purchase and loan of commodities, hotel expenses, and for the disposal of quantities of explosives. (The charges for lease of seized lands and buildings are under consideration).

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ITEM 3 (Continued)

Meanwhile, the greatest expenditure of the Allied Forces covers soldiers’ pay; therefore, taking into consideration the gradual decrease in the number of Allied soldiers in the future, this expenditure is expected to decrease. The expenses for equipment have chiefly been spent on maintenance. Consequently, if the expenditure is the same as last year, the total expenditure is estimated at 2,100,000,000 Yen a year.

However, the actual expenditure will be fixed at less than the above figure. This expenditure is paid as charges forwarded from the Bank of JAPAN, but if the special account system for reparation is established, that will become a burden itself.

Full Translation:

The Ministry of Commerce and Industry announced on 25 January, at a press meeting in connection with the new measures taken in labor disputes, that control of production by laborers will be prevented as far as possible. The Ministry, sometime ago, revealed its attitude toward such action, saying, "the control of production by labor unions in coal mines as a weapon in strikes will not be suppressed as long as it observes the regulations provided in mining ordinances".

In view of the fact that this statement gave a severe blow to industrialists, the authorities of the Ministry announced the following view at the meeting. "The control of production by laborers as a weapon in labor disputes, on which the Ministry revealed its views sometime ago, is not what the Ministry anticipated in comprehending the provisions provided in the labor ordinances, and it is not fully covered by the provisions of the existing laws. The Ministry, therefore, in close consultation with other ministries concerned, is conducting investigations. "In view of the present strained production situation, the Ministry hopes for the earliest recovery of industries by the mutual collaboration of capitalists and laborers. In this connection, the Ministry will try to prevent the occurrence of the control of production by laborers, and try to lead such disputes to amicable settlement when there is room for such action. For public welfare enterprises, such as coal mining, the Ministry understands it is necessary to take up such disputes for compulsory arbitration. "It is reasonable to avoid such action in coal mines, since it is dangerous if production is controlled by laborers only, in view of the difference of technique of production and the necessity of them maintenance of peace and order in mines."

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