The Political Economy of Taxes and Redistribution in Japan

The past decade has seen a highly polarized debate concerning the Japanese fiscal system, particularly the role of income tax. Several authors argue that Japanese income tax is grossly unfair to low- and middle-income taxpayers, while others depict it as the most progressive in the industrialized wo...

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Bibliographic Details
Published in:Social science Japan journal 2002-10, Vol.5 (2), p.159-178
Main Authors: Dewit, Andrew, Steinmo, Sven
Format: Article
Language:English
Subjects:
Bureaucrats
Corporate income taxes
Debt restructuring
Decentralization in government
Expenditures
Fiscal policy
GDP
Government spending
Gross Domestic Product
Income taxes
Intergovernmental tax relations
Japan
Local government
Personal income taxes
Political economy
Politics
Public works
Social sciences
Tax administration
Tax increases
Tax policy
Tax rates
Taxation
Taxation systems
Taxpaying
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Summary:The past decade has seen a highly polarized debate concerning the Japanese fiscal system, particularly the role of income tax. Several authors argue that Japanese income tax is grossly unfair to low- and middle-income taxpayers, while others depict it as the most progressive in the industrialized world. Indeed, many critics claim that it is too progressive, and some even denounce it as 'socialist'. What is sorely lacking is an account that places contemporary Japanese taxation, and the larger fiscal system, in a comparative and historical context. That is what this paper offers. We argue that Japan's tax system is neither highly redistributive from the rich to the poor nor vice versa-at least in the traditional way that redistribution is understood in most Western tax systems. Rather, Japan stands out for the scale of its inter-regional redistribution and the debilitating politico-economic incentives that stem from it.
ISSN:1369-1465
1468-2680
DOI:10.1093/ssjj/05.2.159