The Economy Revitalization Committee (Dean, Mr. Hiroshi Kato, Kaetsu University) of the Japan Productivity Center (President, Mr. Tsuneaki Taniguchi) issued a policy proposal, "Aiming at Economic Growth and Budget Discipline"
This proposal was meant as the economic policies to be adopted by the new Kan Administration that took office on June 8, 2010. The proposal aimed at creation of jobs and anti-deflationary measures in the short term and fundamental restructuring of tax system towards fiscal year 2015 when the Japanese baby boomers reach the age of 65 to reinvigorate Japanese economy.
Specifically, the proposal suggested that the consumption tax be raised to 15% and the effective corporate income tax rate be reduced to 25% to achieve both economic growth and budget discipline. It also suggested that citizen-numbering that could be used in various aspects of daily life be introduced by fiscal year 2014 to facilitate such changes.
The key components of the proposal are as follows:
- Allocate 5 trillion yen to create jobs and counter deflation.
- Improve the potential growth rate to above 2%.
- Budget should include total amounts for 3 years and target outputs.
- Increase consumption tax to 15% by fiscal year 2015 to correct structural deficit.
- Reduce effective corporate income tax rate to 25% by fiscal year 2015.
- Strengthen monitoring to improve order of capital market.
- Introduce citizen-numbering system to improve convenience by fiscal year 2014.
