Press translations [Japan]. Economic Series 0226, 1946-01-29.

Full Translation:

Supporters of the corporation war profit tax as well as the corporation property tax were in the majority based upon answers collected in a public opinion investigation conducted by this paper in connection with the three newly promulgated tax bills. The new taxes on property, war profits and profit increase will play an important role in the restored of JAPAN'S economy. These taxes aim to collect a revenue of 100 billion yen from three million tax payers. The paper distributed 1,500 investigation cards throughout the country on 15 January. Of these 471 Cards or 13.4 per cent of the total were sent back to the paper's office by 23 January. The following are the results of the investigation, classified in individual tax category:

Corporation War Profits Tax

In answer to the question of whether it is proper or not to levy a 100 per cent corporation war profit tax, 338 or 72 per cent of the answers said yes, while 91 or 19 Per cent answered negatively. Forty one or nine per cent of the total did not give definite answers to the question. Among the reasons supporting the 100 per cent taxation were: 1. It will help prove the idea that war does not pay, 2. It prevents inflation; 3. High tax rates should be adopted since laborers were compelled to work at lower wages, while corporations gained profit during the war; and 4. The rate should be raised to 150 per cent in order to cut the capital of such war profiteering corporations.

The following were the main reasons for appealing the promulgated tax rate: 1. The respective corporations have been paying tax on their reserve funds every fiscal year. Therefore a 50 per cent tax rate would be reasonable; 2. The reserve funds help stabilize individual corporations and a 100 per cent taxation does not conform with this principle; and 3. Since most of the reserve funds are used as movable funds, a 50 per cent rate is adequate.

On the question of whether to tax juridical persons (ZAIDANHOJIN) and corporate juridical persons (SHADAN HOJIN), 368 or 78 per cent said yes 55 or 12 per cent said no, and 48 or 10 percent gave no answer. Reason for supporting the taxation upon such organizations included: 1. Strict investigations should be conducted, because some corporations try to evade taxation, under cover of juridical or corporate juridical persons 2. Such organizations do not differ from ordinary corporations which conduct business transactions; 3. The nature of such organizations has been changed by the militaristic elements; 4. Such organizations

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ITEM 1 (Continued)

will not lose their functioning capacity even if such a tax is levied; and 5. It is a matter of course in view of the present condition of JAPAN.

Those reasons to the contrary included 1. Such organizations did not profit by war, and 2. The nature of the public organs render them unnecessary against the question of whether it is reasonable to levy 20 per cent and 30 per cent taxes respectively upon reserve funds and other properties of corporations, 288 or 62 per cent replied yes, 83 or 18 per cent said no, and 100 or 20 per cent did not give an answer. These replies, however, did not clearly explain the reasons.

On the question of whether it is reasonable to levy a 15 per cent tax upon the reserve funds and a 25 per cent tax upon other properties of specia1 corporations, 269 or 57 per cent said yes and l09 or 22 per cent said no, and 93 or 21 per cent did not give answers.

Individual Property Increase Tax

The individual property increase tax will be levied upon properties increased between 1940 and 1945. The taxation is subject to reduction on the assumption that the prices of commodities have gone up by 100 per cent. On the question of whether this subtraction rate is reasonable or not, 204 or 44 per cent replied yes, 231 or 50 per cent said no, and the remaining 36 or six per cent gave no answers. Among the reasons supporting the rate were: 1. The rate of rise of prices is over 100 per cent, 2. It increases the tax revenue, but the basis of appraisal for taxable properties should be studied separately; 3. The who are liable to pay the property increase tax are assumed not to suffer from the high prices of commodities. Those in opposition advocated an increase in the rate, since the rate of 100 per cent is not fair where the present black market prices are taken into consideration

In reply to the question whether or not the basic tax exemption amount of 10,000 yen is reasonable, 193 or 41 Per cent replied yes, 236 or 50 per cent replied in the negative, and 4l or nine per cent gave no answer. Reasons supporting the amount were; 1. It is possible to use it to maintain an average daily life; 2. It will compell profiteers to offer their hoarded properties, and save honest people; and 3. If an amount of over 10,000 yen is admitted, it will encourage tax evaders to transfer corporation properties to individual propertie[illegible]

The negative reasons included 1. The amount should be raised to 20,000 yen in view of the recent sky-rocketing prices, and 2. The exemption rate should be made flexible for those who transact business and those who earn salaries or wages.

Individual Property Tax

Altogether l94 or 42 per cent supported, 219 or 47 per cent opposed, and 58 or 11 per cent did not give answers to the question of whether or not 20,000 yen is a reasonable amount of tax exemption in the individual property tax. The following were the main reasons for supporti[illegible]the rate: 1. Even those who are engaged in ordinary honest jobs (TN. Black market dealers are not included in this category though the can earn much money) have properties valued at that amount; 2. It is sufficient to maintain daily life under the present economic circumstances; and 3. In order to overcome the impending crisis, the love rate is advisable, but 20,000 yen is quite reasonable.

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ECONOMIC SERIES: 226 (Continued)

ITEM 1 (Continued)

Opposing reasons included: 1. In view of present high prices, the exemption amount should be set at between 30,000 and 100,000 yen; 2. It is not proper to fix 20,000 yen for both urban dwellers and agrarians, and some advocated the rate of 30,000 yen and 20.000 yen respectively for city dwellers and farmers.

Asked whether or not it is reasonable to deduct 10,000 yen per household of war sufferers, 171 or 36 per cent replied yes, 269 or 58 cent answered in the negative, and 31 or six per cent gave no answer. Those opposing advocated an increase in the amount in view of the present high prices. They suggested an amount between 20,000 and 50,000 yen. Some insisted that actual losses should be exempted from taxation.

The deferment of the tax payment was supported by 243 or 52 per cent, but was opposed by 138 or 29 per cent. Ninety or 19 per cent gave no definite answer. The main reasons supporting deferment included, 1. Most people do not possess much cash; 2. The deferment limit should be fixed at two years, in order to prevent inflation; and 3. Unless postponement is permitted, the valuation of both movable and immoveable properties will fall down, which will invite confusion.

The following were opposing reasons: 1. Since payment in kind is permitted, deferment is not necessary; 2. It is meaningless to allow such postponement, when future inflation is taken into consideration; 3. It gives opportunities for evasion; 4. It delays economic recover;5. Sometimes immovable properties can not be changed into cash; and 6. The delay should be permitted only to war sufferers.

Altogether 139 or 30 per cent supported 1946 as the tax collection year, while 286 or 61 per cent opposed it; the remaining 45 or nine per cent did not answer. Most people suggested that the tax collects should be made at the earliest possible date, otherwise it will not contribute toward the prevention of inflation, and economic reconstruction.

The recent high prices and the delay of the reconversion into peace time industries of former munitions factories are due to these three new taxes. This view was supported by 267 or 57 per cent, while 152 or 32 per cent denied this, and 52 or 11 per cent gave no answer. Among the reasons in agreement were 1. The law should be enacted without letting the Nation know and 2. The immediate enactment of the 1aw is advisable. Those opposing attributed the reasons to: 1. The shortage of foods and the loss of zeal by the people after the defeat in war; 2. The impossiblility of foreseeing future developments; and 3. The lack of powerful politics.

To the question whether or not it is possible to attain the main objectives to prevent inflation and reconstruct economy, by the anticipated tax revenue of 100 billion yen, 153 or 32 per cent answered yes, while 250 or 54 per cent answered no, and 68 or 14 per cent gave no answer. The opposing reasons .included: 1. Until the nation's self-consciousness is restored, economic measures alone can not supress. inflation; 2. Until the short supplies of commodities are solved, and the maintanance of peaceful life in the Nation has been established it is impossible to prevent inflation; and 3. There is no reliance by the Nation on Government measures.

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ECONOMIC SERIES: 226 (Continued)

ITEM 1 (Continued)

Those who supported it advocated 1. That measures to meet deflation should be taken simultaneously with those on inflation, 2 The project will contribute much toward preventing inflation, because about a quarter of the total properties is expected to be collected.

Control of Withdrawals

Asked whether control on the withdrawing of deposits should be imposed or not, 292 or 62 per cent said yes, while 148 or 32 per cent said no, and others numbering 31 Six Per cent gave answer. Those supporting the control gave as their reasons the fact it would help the Ration in its economic life. The main opposing reason is that it would obstruct economic activities. Some suggested that the government should order the Nation to deposit all cash and such controlling measures should be taken after that.

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