Japan Institute for National Fundamentals

Speaking out

Takashi Arimoto

【#993】Opposing Tax Hikes for Defense Budget

Takashi Arimoto / 2022.12.14 (Wed)

December 12, 2022

Prime Minister Fumio Kishida has indicated a policy of raising taxes to cover some 1 trillion yen as financial resources for increasing Japan’s defense spending. While Kishida should be commended for vowing to fundamentally enhance deterrence and coping capacity amid deteriorating security environment around Japan, abrupt dependence on tax hikes is unacceptable. I would like to urge Kishida to withdraw the policy.

Abrupt instruction by Kishida

If Kishida intends to increase taxes, the matter should be considered first within the ruling Liberal Democratic Party. On December 8, however, Kishida instructed to consider tax hikes out of the blue. Furthermore, he indicated that a decision should be made by the end of the year. This is extraordinary.

At a press conference on December 10, Kishida emphasized that discussions on the matter had been accumulated since early this year. Within the LDP, however, reaction was different. His remark was taken as abrupt. Even within his cabinet, some differed from Kishida.

If discussions had been accumulated since early this year, the tax hikes should have been offered as a campaign promise for the House of Councilors election in July. In the campaigns, however, the LDP did not mention tax hikes, while pledging fundamentally enhance defense capabilities. Questioned on this point at the press conference, Kishida said: “It may be important to advocate matters in campaign promises. But politics has been evolving irrespective of the election timing. As discussions have matured past the House of Councilors election, I am now requesting the people to cooperate.” This explanation is not persuasive.

Policymakers should try to refrain from imposing burdens on the people as far as possible. If they have no choice but to increase taxes, the will of the people should be surveyed through a general election of the House of Representatives. Kishida has no intention to call such election at all. It is erroneous as a process.

Spearhead for Finance Ministry

In February 1994, then Prime Minister Morihiro Hosokawa suddenly announced a plan to introduce a national welfare tax. Questioned on the ground for the new 7% tax, he described the figure as a rough one, admitting that reasons for the tax rate were vague. He rapidly lost centripetal force. In three months, his government collapsed. Kishida advocating more than 1 trillion yen in tax hikes reminds me of Hosokawa.

The revised three national security documents including the National Security Strategy to be announced soon by the Kishida government advocates counterattack capabilities, active cyber defense and many other new items that even the late former Prime Minister Shinzo Abe known for his strong emphasis on national security failed to promote. I do hope Kishida would implement them.

Given that measures to raise more than 1 trillion yen for defense spending growth is designed for 2027 or later, Kishida should leave the measures for discussions within the ruling party before any final decision, without pushing ahead with tax hikes as a spearhead for the fiscal conservative Ministry of Finance. Kishida has boasted of his ability to listen to others since his inauguration as prime minister. It is time to demonstrate the ability.

Takashi Arimoto is a Planning Committee member at the Japan Institute for National Fundamentals and publisher of Monthly Magazine SEIRON at the Sankei Shimbun newspaper.