In which Curzon finally gets impressed by the DPJ

* Kan decides to seek 5 percentage point cut in Japan’s corporate tax
* A free-trade agreement between the United States and Japan is on the negotiating table–despite the outrage of agricultural interests
* Japan plans to tolerate unlicensed uses of copyrighted works
* Japan is expected to adopt a more “dynamic” forward-leaning military posture as part of a sweeping strategic defence review focused on real or potential threats from China and North Korea
* Japan’s defence ministry is determined to push for an easing of the nation’s ban on arms exports in spite of strong political opposition
* Malaysian long-haul budget airline AirAsia X is to launch regular flights between Kuala Lumpur and Tokyo starting December 10

No further comment. All of these are good steps forward — many of which could never have been accomplished with an LDP administration.

30 thoughts on “In which Curzon finally gets impressed by the DPJ”

  1. What’s so good about this one?
    “Japan’s defence ministry is determined to push for an easing of the nation’s ban on arms exports in spite of strong political opposition”

    I mean, on a purely economic point of view, yes, but besides that…

    Can’t say I’m very proud of France being such a big exporter of weapons, personally.

  2. Arms exporting would be a good way to boost the Japanese vehicle, aerospace and electronics industries. “Arms” doesn’t just refer to guns; it basically refers to any kind of military/defense equipment. A lot of France’s “arms” output comes from EADS manufacturing of tanker and transport planes which are closely linked to the civilian Airbus aircraft program.

  3. It’s a good way to save your defense budget.Now we can develop arms with the U.S or EU with less budget.

  4. I do not wish to rain on anybody’s parade here, but just look at the wording in ALL of those headlines: “decides to seek”, “plans to tolerate”, “expected to adopt”, “determined to push”, “is to launch”.

    I personally seek to live forever and rule the world, too. The DPJ has a good sense of direction, but has so far been mighty short on road maps. Let us see how many of these will have become reality a year down the line.

  5. I’m cynical too. Wake me when it’s all done.

    “Proposing a partial end to spousal tax deductions to spur more women into the workplace.”
    Not happy about this idea either. I want all the tax deductions I can get.

  6. Given the scare about Japanese remilitarization during the Koizumi and Abe years, it is notable how lucid the round of coverage of the “new” miltiary direction is. From the Financial Times –

    “Japan is not rearming. Any build-up in missiles and ships should be offset by cuts to tank forces. Moreover, this is no rushed change. Tokyo has been debating the shift for some time… China will not like the shift in emphasis, but Beijing has itself to blame. It fluffed the opportunity to reset the relationship with Tokyo after the Democratic Party of Japan’s election victory last year.”

    China took yu ai and turned it into f yu.

  7. Taxes and other withholdings like health care and social security are going up in Japan and that’s just the way it is. Try and get a raise at work if you can. And if the government needs to raise taxes, it’s commendable of them to try and do so in a way that would help the economy and further gender equality. Unfortunately there are a lot of populists in the DPJ blocking the path. They’re happy to announce new benefits but won’t agree to anything that might damage their reelection chances. Sound familiar?

  8. “Taxes and other withholdings like health care and social security are going up in Japan and that’s just the way it is.”

    unless you’re a corporation, right? And then you’re getting a 5% cut?

    and all of this – less tax for corporations, and more for citizens -is the “good points” of the dpj?

    Republican Frog Travelog?

    Palin in 2012!

  9. “Japan’s defence ministry is determined to push for an easing of the nation’s ban on arms exports in spite of strong political opposition”

    Anyone who has been following this knows that the MOD has been pushing a relaxation for a while. Doesn’t mean much though. There are other ministries, not to mention bureaus within MOF, that share responsibility over the area of exports. And the DPJ will be against it as long as they need the SPJ to help them pass the budget.

    As for dynamic defense… even fairly senior bureaucrats don’t know what that means. As far as I can tell, the number of destroyers and subs will remain about the same, although the MSDF might get an extra aegis destroyer. I think it is more a formal recognition that the status quo changed some time in the 1990s than any great pronouncement of new strategic doctrine.

  10. “dynamic defense”

    It also seems to mean getting rid of tanks. Wouldn’t it be clever if Kan, who we know has (had?) old school left allegiances, rides this recast in a way that makes any more Middle East participation impossible? Commit big for an East Asian naval war that will probably never happen and stay out of ground wars in the MidEast that probably will.

    This is the the same thing that the Marine Corps is trying to do – “going back to their original purpose” (amphibious landings) is another way saying “we don’t like deserts”.

  11. less tax for corporations, and more for citizens -is the “good points” of the dpj? Republican Frog Travelog?

    I don’t consider myself “conservative” or Republican, but I find corporate taxation to be a very dumb idea in general. It doesn’t raise much money and there are many ways to avoid paying it — one of the most popular being to simply make income in a low-tax environment like Hong Kong, Singapore or a British overseas possession. Since the tax eats up nearly half of the profits from any sizable business venture in Japan, it discourages companies from investing here unless they absolutely need to be here, and that screws people in Japan out of job opportunities.

    Besides that, there are other taxes on corporate profit. Say I own some stock in a big company. They make a ton of money one year, and give half of it to the government as tax. Their stock price goes up, they pay a dividend. I pay dividend tax on the dividend I receive. Then I go to sell the stock and I pay capital gains tax on the appreciation in value.

    I personally think it makes the most sense to pay taxes entirely on an individual level, and progressively based on each individual’s income, rather than having overlapping flat or nearly-flat tax rates on profit that is made through various types of collaborative business structures…

  12. I still don’t quite understand why capital gains are taxed at an unusually low rate, rather than just being counted as straight income. Yes, I know there’s an argument for offering a lower tax rate for investments that are held for a long time to encourage investment over day-trading, but it’s so large scale that it still feels like nothing more than a massive tax break for people who make most of their money from inherited capital rather than genuine income.

  13. “…not very amused with the defense plan.”

    Neither are many in the MOD, from what I can tell. The bit that they really wanted (arms exports) have been taken out, and they really hate the troop reductions, because it will be hard to claw them back. It seems now all they’ll get is a few subs (OK, that is noteworthy), a few more ABMs (which they could expect anyway) and “dynamic defense” – a linguistic device aimed at replacing Japan’s stated policy since 1976 of maintaining only “basic defense power”. Any idiot can see that the 1976 policy was superseded long ago, so big deal.

  14. Capital gains basically get a better rate because capital is more mobile than labor. In other words, if you tax investors they will flee quickly: if you tax employees they will flee very slowly if at all.

  15. ”It seems now all they’ll get is a few subs (OK, that is noteworthy)”

    The thing is MSDF will not going to get any “new”subs.MSDF subs average life cycle was about 16 years,which was unusually short.Now MoD is going to keep the subs for just a few more years before the early retirement,so the fleet will be from 18 (16 for operation two for training)to 20.

    These early retirement of the subs were due because of MSDF has been purchasing one sub a year and two shipyards belong to two different companies(Kawasaki Heavy Industry and Mitsubishi Heavy Industry)has been getting these contracts.Two companies has been building one submarine every two years,so naturally they could keep on working seamlessly.16 submarines fleet with 16years life span comes from the demand of industry-ministry relationship,nothing to do with the naval strategy.

    So what seems to be happening is Kan had rejected any increase of defense budget inspite pf recent regional tensions.The only beef was the relaxation of arms trade and without them,this defense doctrine is pretty much meaningless.

  16. It would be nice if the map on that article was accurate. I’m pretty sure the boats didn’t crash in Seoul, where the marker is placed.

  17. “What they really need is some sort of trilateral NATO to save both Korea and Japan from Chinese fishermen…”

    Korean fisherman do come into the Japanese waters and act pretty much the same way.
    You might also be interested to know,that this fishing dispute isn’t at all a news in Korea whilst it got the headline in Japan.Seemingly Koreans want play low key on dispute with the chinese.

  18. @Joe:
    “Capital gains basically get a better rate because capital is more mobile than labor. In other words, if you tax investors they will flee quickly: if you tax employees they will flee very slowly if at all.”

    So if the guys can flee easily, let’s not try to get anything out of them, but put the burden on the guys that can’t flee easily ?
    That sure is an easier way to be sure to get your money, but it kinda misses the human factor.

    I do understand you dumbed the concept down a bit, and I do know there’s truth in it, but well…
    If the only advantage of very mobile capital is tax evasion, that’s not really an advantage anymore. Mind you, I don’t think immobilizing capital is a good idea either.
    As always, good balance is what’s necessary, and that’s hard to get on a global scale.

  19. A related point: in markets where labor is both highly mobile and highly skilled (law firms, finance, some engineering fields), individual income taxes actually end up being borne by employers as part of labor costs. In other words, if I have a choice of paying 40% of my income in Japan or 15% of my income in Hong Kong, and can just as easily choose to live under either regime, the employer in Japan will have to offer a much higher effective gross income to offset that difference or else I will be out the door. The “individual” tax effectively becomes a “corporate” tax this way.

  20. Good point. It still concerns only a very small percentage of the total workforce of the country, so it’s hard to make general changes on that base.

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