Saturday, May 30, 2015

In Japan, You Get a Tax Break and a Side of Lobster and Beef

This NYT article explains an interesting system of tax cuts reminded me of the Irish Double Dutch Sandwich we discussed in class. Countries, or in this case, local governments, compete to give businesses or rich people tax breaks, while in the end, arguably, hurting more than helping the “average” or “middle-class” person.


“Taxpayers who donate money to Hirado get a nice deduction and a shipment of slipper lobsters, spiral-shelled mollusks and oysters.”

“The cost of thank-you gifts is also rising steadily as local governments compete to attract patrons — leaving less to spend on civic projects. Urban areas, where most donors live, end up bearing the cost, according to Takero Doi, a professor at Keio University, since donors’ tax write-offs subtract from other cities’ revenue. ‘Ultimately, it’s a zero-sum game.’”



Do you agree that this tax break is a zero-sum game, or do you think the forgone tax revenue is worth the gain rural cities receive from increased business and funding? Is this tax policy better or worse than models that benefit corporations like the Irish Double Dutch Sandwich? Do you think a system like this could ever work in the United States?

7 comments:

  1. Wow, this is pretty strange. It's hard to say if these tax incentives are better or worse than the Irish Double Dutch Sandwich, because they are both immoral in one way or another. Whether it's evading paying taxes, or getting a break on taxes with a side of fresh seafood; both are hurting the have nots by allowing the haves to break the rules simply because they are bigger or have more money. They both perpetuate the immoral dishonesty that is a major cause of inequalities.

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  2. I think that this was honestly a well intentioned idea that has gone off the rails a bit. The donations and gifts as a result are nice gestures and can really help small cities, but only if the donations are worth more than the gifts themselves. I also see a problem of shortfall in terms of taxes since all the donations are being written off. Where are the governments going to get the money to replace the write-offs?

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  3. Like Nolan mentioned I think that it's original intention may have been attracting businesses to rural areas by incentives and tax breaks, similar to what Michigan did in giving tax breaks to movie makers in Michigan. This boosted business in areas of Michigan such as Pontiac and Detroit. I think I would like to know more about the organization "Hirado" and what its function is in Japan in order to make a more informed decision; however, if the cost of the seafood is outweighing the increased business I definitely see it as a misuse of funds.

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  4. I agree with Nolan and Taylor that the initial intentions of such a program seemed good. But as the prices of the "gifts" increase and the donors themselves bear the cost, I don't see how the program benefits the Japanese economy as a whole. In other words, Japan will have to find other incentives for donations

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  5. I agree with the previous comments. I think the intentions for the program and how it is turning out to be have differed. I do commend the Japanese government for creating such incentive programs in the more rural areas. That being said, I think the program needs further polishing or revising because it seems to have potential. All in all, I think it would be interesting see where this program is or if it is still active in the near future.

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  6. I like what Nolan's idea that this is something that started off as a genuinely, well-intentioned idea, but it feels like it blew up to be something way bigger than was planned. But if this did turn out the way it was intended to, who thought this was a good idea? Lobster and steak? That's about expensive as you get! Maybe they should switch to carrots and brussel sprouts?

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  7. I agree with many of the previous comments. This idea had good intentions at first. However, it seems as though the costs are outweighing the benefits of the donations received. It does not seem like this tax break is a zero sum game, but I would have to do more research to fully answer that questions. I would also like to know more about Hirado and what exactly this organization does for Japan.

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