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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: chirodoc who wrote (802)	3/27/1998 9:48:00 AM
From: Machaon	Read Replies (1) \| Respond to of 3902

Tax cuts are coming. Those who stand in it's way will suffer the political consequences. ======> ----------------------------------------------------------------- Friday March 27, 5:22 am Eastern Time Japan reform council expected to take the blame TOKYO, March 27 (Reuters) - The 31-member council that will debate the need for wide-ranging tax cuts to jump-start the Japanese economy is a powerful group of lawmakers representing the spectrum of the governing alliance and its feuds. The panel, originally formed to cut back on Japan's bloated budget deficit, is now set to give Prime Minister Ryutaro Hashimoto the political cover to reverse course and lower income taxes. Formally known as the Fiscal Structural Reform Council, it is headed by Hashimoto. When the council first convened in January 1997 there were predictions that despite agreement on the overall goal it would bog down over the details. But Hashimoto got some leadership points when the panel actually came up with its proposals. Now, with the economy sliding as fast as Hashimoto's popularity, the rush is on for some strong measures -- in the other direction. LDP officials on Thursday unveiled the bare outline of what they said was a 16 trillion yen ($124 billion) plan to boost the economy but hold the line on taxes. But within hours of its release, there was already a push for sweeping tax cuts, and a recall of the council was proposed. The group includes some figures who have been pushing for a tax cut and some who are vehemently opposed. The two camps have come increasingly into the open with their dispute. The panel includes four former prime ministers -- Yasuhiro Nakasone, Noboru Takeshita, Kiichi Miyazawa and Tomiichi Murayama. Nakasone and Takeshita are on the record as urging tax cuts. Also included are five of Hashimoto's senior cabinet members, two ex-finance ministers and top people from the other two parties in the loose ruling alliance. The betting this round is that the group will agree in the end to revise the fiscal restraint law that currently calls for an end to deficit financing by the 2003/04 fiscal year. One popular proposal is to delay the deficit goal by two years to give breathing room for income tax cuts. Estimates for reductions have ranged from four trillion to six trillion yen. But with government policy changing almost daily, political analysts are more cynical than usual. ''Whatever the panel comes out with will be whatever the LDP thinks. It's just a mouthpiece for the LDP,'' said John Neuffer, political analyst at Mitsui Marine Research Institute. ($1 equals 129 yen) ---------------------------------------------------------------------