JAPANESE WAR PROFITS

Wanganui Chronicle, Volume 89, Issue 279, 26 November 1945, Page 5

JAPANESE WAR PROFITS

ALL TO BE TAXED MACARTHUR’S DIRECTIVE EFFORT TO REDISTRIBUTE COUNTRY’S WEALTH Reed. 8.20 p.m. Tokio, Nov. 25. In the most strongly-worded directive so far issued, General MacArthur has ordered the Government to tax away war profits of all Japanese firms and individuals, and impose a capital levy, ranging from 7ft per cent, on corporate and private fortunes, including the Imperial household’s and all pro hibited Government finances, and directed the Japanese to submit to a complete war profits tax programme to the first session of the Diet in 1946 He has also ordered the Government to terminate, by February 1, payment of any discharge allowances or service pensions to Japanese veterans, except as compensation for physical disability. This to be limited to the recipient’s ability to work. The directive added that certain Japanese interests, for many years, had been used for unjustified and aggressive war to enrich themselves illegally. The directive would show all Japanese that war is financially unprofitable, by ensuring that the tax includes a period not only dating from the perfidious attack on Pearl Harbour but includes the previous period to the n-aximum extent possible. The directive also blocked Government funds intended for payment of war indemnities to Japanese firms and individuals on which the Government still owes approximately 50,000,000,000 yen. It gave the Government 30 days to recover all such war indemnity payments of more than 50 000 yen made since August 15. The directive added that efforts would be made to permit the farmer, labourer and small business man t*o retain legitimate savings.

The Associated Press says that generally the programme contemplates a, 100 per cent, war profits tax on all war industries, and a graduated tax to 100 per cent, on all other corporations and individuals, supplemented by a gradual capital levy to at least 70 ner cent. The recapture of war profits and the capital levy will, it is expected, yield more than 100,000,000,000 yen, thus providing the financial basis for a reorganisation of Government finances towards peaceful ends.

General MacArthur described the directive’s termination of service pensions as a major step towards lightening the deadweight burden which the Japanese militarists forced the rest of the country to bear. An accompanying statement outlined the directive’s purpose. . “The Japanese Government already is heavily in debt,” said the statement. “New taxes and anti-mili-tary pension plans should convince everybody else in Japan from the biggest industrialist to the man in the street, that war does not pay. Hardest hit will be those who made the greatest profits from Japanese aggressions, and the overall plan is going to result in a more equitable distribution of wealth than Japan has ever had. The power of the wealth of a few big people is being taxed away, so that a greater number of little people can have a fair chance to run their farms and get decent prices, and for work in industry get a fair wage and enter business with less fear of monopoly controls. There is a large share of war guilt among those who will lose the most money.”

Outstanding Japanese Government bond issues at present total more than 129,000,000,000 yen, with a floating debt of another 40,000.000.000 yen not including contingent liabilities A continuation of uncontrolled Government borrowing and spending would be disastrous.