The Glorious Revolution determined a principle that the
government cannot pose tax on the people without consent from them. American
Revolution was a great protest against taxation of British government. Now,
Prime Minister Shinzo Abe insisted that taxation was the basis of democracy.
That was why he dissolved the House of Representatives and had general election
to ask legitimacy of rescheduling consumption tax hike, which did not really
make sense, though. Now he made minor changes in tax system without any
election at the end of the year.
For individual, the government encourages transferring
personal property from parents to children. Taxation on donation from parents
or grandparents to children will be eased from FY 2015. Money contribution of
building houses or college tuition will be more supported by tax exemption than
now. Helping children’s or grand children’s budget for marriage or raising
children will be supported by lighter tax. The government thought that ¥1.6
quadrillion of personal monetary asset mostly owned by aged people will be
consumed with stimulus on family transferring.
Tax exemption on small amount of savings on stock or
investment trust, which has strange name called NISA, abbreviation of Nippon
Individual Saving Account, will be broadened from ¥1 million or less to ¥1.2
million. This is a preferable policy for stockowners. For house owners, the
government will extend support on interest of housing loan. If you have enough
money for buying a house, you will receive benefit from national government. If
you do not, nobody cares.
For corporations, actual corporate tax rate will be
gradually reduced. In FY 2015, taxation on corporations both by national and
local government will be reduced by 2.51% from 34.12%. It will be further lower
in FY 2016, when the tax rate will be reduced to 31.33%. Abe administration is
willing to reduce the rate lower than 30% to encourage more active business.
One of the controversial decisions was introducing
size-based business tax. Major corporations will be posed heavy tax, even if
they are in red. Major corporations will be in a great competition, while small
and mid-size firms will not receive benefit. If this reform works negative on
corporation, the impact will be falling on not only the business management,
but on workers or wages. As many recognize, the government did not show this
time again its positive attitude for improving balance of national budget. It
is unclear what the administration really wants to do.