In Japan, there is a controversial issue on how to do with the economic divide between town and country among policymakers. Major cities in Japan like Tokyo and Osaka are becoming economically larger, regional rural communities shrinking. (Even the economic gap between Tokyo and Osaka is widening; That is, Tokyo is now getting larger and larger whereas Osaka is going more stagnant because of the companies in Osaka leaving to Tokyo and other major cities in Japan.)
Finance Minister Omi is thinking about planning to shift road taxes to general revenues and expending them on reviving regional communities. I think it is a good plan. I hope he will realize the plan. Here's the excerpt:
Saturday, Nov. 25, 2006
Omi eyes tapping road taxes to rev up regional economies
Kyodo News
The government may allocate tax revenues marked for road projects to revitalize regional economies as part of a plan to shift the money to general revenues, Finance Minister Koji Omi said Friday.
In reiterating the government plan to shift revenues from road-related taxes to general revenues, Omi told reporters, "Since there is also a need to revitalize the regional economies, we will address the matter." The Cabinet's priority is to revitalize the regional economies, ....as pledged by Prime Minister Shinzo Abe.
The Fiscal System Council, a body that advises the finance minister, also recommended Wednesday that funds from various road-related taxes, including the gasoline tax and the automobile acquisition tax, be used to cover general expenses.
The rates of the road-linked taxes, which include state and local levies, have been roughly doubled since 1974 in order to carry out road projects across Japan.
Some ruling party lawmakers strongly oppose the plan, saying tax rates should be returned to previous levels if the revenues are used for projects other than road-related ones.
However, why do some politicians oppose such an epoch-making plan? Here's my conjecture: It is because they benefit from the road-related services. They protect their special interests because they want to keep the votes of the people who engage in the road-related services like constructors and staffs employed by road agencies. In economic words, this is a kind of rent-seeking.
I don't blame such politicians for seeking not national interests but their own special interests. I expect most of them will not be supported because many people come to realize that they do the political activities for not national interests but themselves. This may be a sort of the effects of Koizumi structural reforms.
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