atomic_fungus (atomic_fungus) wrote,
atomic_fungus
atomic_fungus

#1704: Japan's going socialist. (More socialist, sorry.)

The Democratic Party of Japan--DPJ, actual real name!--is planning to give families ¥26,000 (about $250) per month per child through junior high.

The DPJ swept the Diet and will elect a new Prime Minister.

"The Democrats are also proposing toll-free highways, free high schools, income support for farmers, monthly allowances for job seekers in training, a higher minimum wage and tax cuts."

The cash-for-kids thing--Japan's problem with its birth rate has little to do with expenses and a lot to do with how its society does things. Many people decide against marriage solely because there is no incentive to marry: marriage ends up being a joyless restriction where the father spends most of his time at work and the wife spends most of her time at home. Affairs are common, on both sides.

Compare that to the life of the single person: there's no guilt from having sex with whoever you are able; you have more disposable income because you're not raising children; you're free to take trips whenever you like (or, at least, whenever you have vacation time).

There are fewer marriages, and fewer marriages which produce children.

It's true that subsidizing an activity leads to more of it; I can see this working to some extent but I have no idea if it will solve the problems Japan has with its birth rate.

On the plus side, at least Japan is trying something.

As for the other things? Increasing spending while cutting taxes? Cutting taxes is never a bad idea, particularly when you're in a recession. But I know what the Democrat party (ours, I mean) means when it talks about "tax cuts", and I doubt the DPJ is going to do much different when it's "an eclectic mix of former Liberal Democrats, socialists and progressives". (Bit redundant, that. "Socialist" is "progressive", and both are "leftist".)

The DPJ "tax cuts" probably amount to "welfare increases" the way they do here. In our case, "tax cuts" for the bottom 40% of wage earners end up being increases in the Earned Income Tax Credit (EITC). If you make less than a certain dollar amount in a year you may qualify for EITC.

Let's say you made $10,000 this year. The government withholds a certain amount from each paycheck, but at the end of the year when you do your taxes it turns out that you don't owe any taxes and therefore you overpaid by--say--$500. (Pulling numbers from an unlikely orofice here as the actual numbers aren't important; I just want to convey the concepts.) Then you do the EITC worksheet included with the tax return booklet, and it turns out you're eligible for an additional $250.

What you end up with is a negative income tax: not only did you not actually pay any taxes, but the government gave you more money than it withheld in taxes from your actual paycheck. You gave--over the course of the year--$500 to the government; but after filing your return you got $750 back.

That's not a "tax cut"; that's welfare. It does not have a stimulating effect on the economy as that money must come from somewhere: it is taxed from someone else, and money taken in taxes is not available for use in the general economy.

I can't imagine "an eclectic mix of former Liberal Democrats, socialists and progressives" giving the upper 40% of wage earners an actual tax cut, even though that's the sort of tax cut which typically stimulates any capitialist economy.

Again: "The Democrats are also proposing toll-free highways, free high schools, income support for farmers, monthly allowances for job seekers in training, a higher minimum wage and tax cuts."

None of the things in the DPJ platform are going to be "free". "Free high schools"? All that means is that the government will pay for them; and the government will need to use tax revenue to do so. Ditto for paying farmers, job seekers, and toll-free highways.

A minimum wage hike will raise unemployment. Not the thing you want when your citizens are already unhappy with the employment rate.

The guy in the picture--Yukio Hatoyama, leader of the JDP--looks kind of like a Japanese Bill Clinton. Heh.
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