Gasoline madness

March 28, 2008 12:00 AM

The "temporary" taxes on gas and diesel have become the major political issue in this country. Well, it is supposed to be "temporarily" added to the formal tax rate, but it has been there for more than forty years. The LDP regimes have renewed this temporary tax rate on gas and diesel every five years without much thought. This tax was first installed by Prime Minister Tanaka Kakuei to speed up "delayed" highway constructions in the countryside. The gas tax, a national tax, and the diesel tax, a local tax, have been dedicated to road and highway constructions.

Now the Opposition with its majority in the other House is trying to kill this temporary tax rate at last. They want to lower the gas and diesel tax and free their usage. The Ministry of Construction and Transportation is vehemently opposed to the lower tax rates, and the dourozoku, the LDP MPs who have strong ties with highway industries, are also strongly reacting to the Opposition's demand to cut.

Former Prime Minister Koizumi had taken steps for general usage of the gas and diesel taxes, but the LDP consistently tried to protect this treasure box of the Ministry as getting subsidies for the highway construction for his own district has been one of the major activities of an LDP MP.

The Government tax bill has been passed by the House, but the Opposition-dominant other House has not yet taken any actions on the tax bill as of today.

Our House can override the other House with the two-third majority. If a bill which we have passed is voted down by the other House, the governing Coalition, with its 335 seats in the 480 member House, could override the other House and enact it. However, if the other House takes no action on the bill, our House must wait for sixty days to lawfully assume that the other House has rejected the bill. Then, the House could vote on the bill again.

The House passed the tax bill on February 29. As the ever-populistic Opposition leader Ozawa is determined to take no action in the other House for sixty days, the temporary tax rate will finally expire on March 31. A litter of gas will cost 25 yen less from April.

Japan is very very unlikely to meet the Kyoto protocol target. Carbon-dioxide emission from the automobile is one of the major causes of increase in global warming gas in Japan. Environmentally speaking, Japan, the host of this year's Toyako Summit where the major topic is the global warming, cannot enjoy the luxury of cheaper gas and diesel now. But Ozawa and the Opposition leadership demand cheaper gas tax for the people.

I have talked to the DPJ colleagues to make a compromise. We agreed to keep the tax rates and un-earmark their spending. But DPJ leadership does not accept any compromise.

As the result of lower tax rates, the revenue loss for the national government will be about 2.6 trillion yen. The local governments will also suffer.

Politics, instead of solving problems, is now creating problems.