Thursday, June 24, 2010

Japan to tax rich more

TOKYO - JAPAN'S new finance minister will push to raise taxes on high earners in an effort to boost revenue and narrow the country's income inequality, he said in an interview published on Thursday.

'I believe we are at a stage where a little bit of egalitarian thinking... should guide our tax policy,' Yoshihiko Noda told The Wall Street Journal.

'In that sense, our tax reform will be designed with an eye toward restoring its income-redistribution function.' Prime Minister Naoto Kan's new administration hopes to revive confidence in Japan by introducing a new era of fiscal discipline and beginning work on reducing the industrialised world's biggest public debt mountain.

Mr Kan and his aides have spoken openly about raising the consumption tax and have not ruled out doubling it as part of a wider tax system reform to prevent a Greece-style meltdown.

'Japan used to derive its strength from its deep and broad middle class, but unfortunately the income gap has grown and so many people have been left behind,' said the 53-year-old finance minister.

'Restoring the middle class is key to rebuilding Japan's strength.' Mr Noda did not discuss specific timing or rates he was considering, the paper said, but he added the government's tax panel will accelerate discussions on a tax-reform plan after parliamentary elections scheduled for July 11. -- AFP.

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