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Jul 30, 2012

[Gendai] Mr. Stiglitz, Nobel Laureate for Economics “Tax Hike Policy by Noda Administration Is Wrong”

Information from Mr. Takeshita posted on his blog – July 27, 2012 –

English translation of a Japanese article: Gendai Net – July 24, 2012 –

Mr. J.E. Stiglitz, Nobel Laureate in Economics, Gives Repeated Warnings: 
“Tax Hike Policy by Noda Administration Is Wrong”

This economic policy makes the 99 percent unhappy.

A rebuttal statement by the grand old man of economics to the nonsense of tax hike policy Prime Minister Noda is going headlong into has finally made an appearance.  “THE PRICE OF IINEQUALITY” by Mr. Joseph E. Stiglitz, the Nobel laureate in economics in 2001, released in U.S. was published (entitled “Economy Making the 99 Percent Unhappy” in Japanese) in Japan on 21st.

At once paging through the book, we find it astounding.  He completely criticizes fiscal austerity by means of the cuts in expenditures and tax hike which the U.S. and Europe have been obsessively devoted to.

The book is summarized as follows:

*Promotion of fiscal austerity will simply aggravate economic downturn and never produce betterment of fiscal situation as expected.

*To make the taxation system not only fairer but more graduated, it is necessary to plug up loopholes and apply tax hike and reduction in tax rate to the richest and the poorest, respectively.

*It is recommendable to abolish hidden subsidies buried in the taxation system and to delete loopholes and other special clauses which have so often enabled so many corporations to evade tax which they are supposed to pay.

*Earnings of the top 1 percent account for more than 20 percent of the whole national income.  With 10 percent increase in tax rate imposed on them, tax revenues equal to approximately 2 percent of the nation’s GDP will be created.

Mr. Stigliz’s opinions and suggestions are based on the fact that this world has been divided into the richest 1 percent and the poor 99 percent.  As politicians and their supporters always carry out policies only for the 1 percent, the 99 percent remain unhappy.  He argues that that is fundamentally wrong.  Many countries in the world have confronted the same tragedy.  The Noda administration is going to follow in their footsteps.

Mr. Stiglitz served on the US Council of Economic Advisors during the Clinton administration in 1993 and served as the vice chairman of the Council between 1995 and 1997.  Subsequently he took office as the World Bank’s senior vice president and concurrently chief economist until January 2000.  He is also known as an active person and joined in a demonstration to protest against widened economic disparities in Wall Street, New York, U.S. in October last year.

Yaroku Koyayashi, a professor emeritus at Tsukuba University, comments as follows:

“EU countries have escalated the fiscal austerity with too much prioritizing financial reconstruction.  As a result of it, the real economy has declined.  In France there was a change in president as a result of the election and they have switched over from a policy of free competition to a policy aiming for ‘improving employment situation.’  As Mr. Stiglitz says, global trend is changing to active macroeconomic policy for business recovery.  On the other hand, Japan is going to take tax-hike measures.  Japan has been left behind the global trend.”

If a tax hike is forced to be carried out under such conditions, only Japan will be isolated.


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