Unrealized profit” exceeds 30 trillion yen due to the weak yen…Reason to believe that the “special foreign exchange market” can cover the funding for the “1,030,000 yen barrier” of the National Democratic Party of Japan.
6 trillion yen” valuation gains in one year…why are they not returned to the people suffering from rising prices due to the weak yen?
The debate over the abolition of the “1,030,000 yen barrier” is hot. The main actor is the Democratic Party of Japan (DPJ), but the party has come under increasing criticism for not clearly specifying the source of revenue for the tax cut. In order to gain the public’s understanding, it is time for the party to present a solid source of revenue.
The most promising candidate for the source of funds is the “Special Account for Foreign Exchange Funds,” or the “Foreign Exchange Special Account. The depreciation of the yen has generated approximately 6 trillion yen in valuation gains (i.e., unrealized gains) in one year, totaling more than 30 trillion yen. The total amount exceeds 30 trillion yen, which should be returned to the people who are suffering from the rising prices of commodities due to the weak yen, but it is still being preserved. Why is it not being returned to the people? What are “unrealized gains on foreign exchange special meetings” in the first place? We ask an expert.
There is strong criticism of the abolition of the “1.03 million yen barrier” advocated by the People’s Democratic Party of Japan (KDP). Most of them dismiss it as “irresponsible” for not providing a revenue source for the tax cut. The government and the LDP have estimated that raising the income tax deduction to 1.78 million yen, which the KDP advocates, would reduce national and local tax revenues by 7.6 trillion yen, but the criticism of irresponsibility has followed them throughout the years because of the close attention paid to the statement by a senior KDP official that “the government and ruling party should be responsible for the financial resources. As a result, newspapers and television stations began to report on the situation.
As a result, when newspapers and television covered the issue, opinions such as “taxes will eventually be raised to make up for the lost revenue” and “administrative services by local governments will be reduced, lowering the standard of living” became prominent (some TV commentators said that “garbage collection will stop”). ) The pattern has been to conclude with the conclusion that the policies are “a popularity contest for the sake of elections.
If one listens to the explanation of Yuichiro Tamaki, the representative of the People’s Democratic Party of Japan (who has been suspended for three months due to an adulterous affair), it is clear that criticism of the government in terms of financial resources is misguided. The main reason is that the elimination of the “1,030,000 yen barrier” is not so much a tax cut as an “inflation adjustment” of income taxes to refund overcharged taxes.
Japan’s tax revenues have been increasing for the past several years, and general account tax revenues have been at record highs for four consecutive years from FY 2008 to FY 2011. The main reasons for the increase in tax revenues are economic growth and rising prices. Particularly under inflationary conditions, income taxes tend to increase at a faster pace than price and wage growth, a phenomenon known as “bracket creep. This phenomenon is called “bracket creep.” Under bracket creep, income tax increases are larger than wage increases, and this is also known as a “hidden tax increase.
