Equity and the politics of taxation in Japan

Abstract

English Contemporary Japan confronts its worst fiscal crisis of the past 50 years. The limits of relying on public debt appear to have been reached, and thus tax increases are returning to the policy-making agenda. But the increases will largely be shaped by the argument that Japan’s tax system is too redistributive. Indeed, fiscal policy makers and the political process are already shifting more of the tax burden onto low-income earners. This article refutes the claim that Japan’s income tax is particularly redistributive, and places the Japanese example in the larger context of globalisation and regressive income tax reforms.