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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (2237)	11/22/1998 9:19:00 AM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 15132

Wally: Japan still struggling with reality: Japan's Ozawa Calls for Suspending Sales Tax to Boost Economy Tokyo, Nov. 22 (Bloomberg) -- Japan's Liberal Party chief reiterated his call to suspend the national sales tax to spur consumer spending stymied by the nation's worst recession in half a century. ''I think freezing the sales tax is the only way to achieve economic recovery,'' said Liberal Party leader Ichiro Ozawa, speaking on a TV Asahi talk show. Ozawa last Thursday whetted investors' expectations of tax cuts by agreeing to an alliance with the ruling Liberal Democratic Party. The dollar fell as much as 3 percent against the yen on the news, its biggest one-day drop in a month, while Japan's benchmark Nikkei 225 stock index surged 2.8 percent to a one-month high of 14,754.13. The Liberal Party leader's renewed call for tax cuts points to disagreements on the issue within the alliance, which the LDP needs to assure passage of a record 24 trillion yen ($199 billion) fiscal stimulus package due in the Diet next month. Less than 24 hours after Prime Minister Keizo Obuchi said he would consider Ozawa's tax plan, Finance Minister Kiichi Miyazawa said the government has no plan to cut the sales tax and won't reduce income taxes by 10 trillion yen, as proposed by Ozawa. The government raised the sales tax on goods and services to 5 percent from 3 percent in April 1997, a move economists say dragged Japan's economy down. Ozawa has proposed temporarily reducing the tax to zero, while Miyazawa and other LDP members have said the government needs revenue from the consumption tax, because income tax receipts will decline in relation to spending needs as Japanese society ages.