Tax cuts on the road in the United States did not solitary. December 13, the U.S. Senate passed the motion on the Obama tax cuts procedural vote; night, Japanese Prime Minister Naoto Kan has announced that it has wild Tianjia Yan Finance Minister and other related members of the Cabinet issued instructions about the current 40% of the corporate income tax by 5 percentage points lower effective tax rate to ease the burden on enterprises to stimulate economic vitality. Tax cuts for creating jobs and stimulating role in promoting economic recovery is evident, but has not won an applause. Even the international rating agency Moody’s warned that if the Obama administration’s tax cuts approved by Congress, the agency may cut the credit rating of the United States. Moody’s analyst Steven Hess, a report released the same day, “from a credit perspective, the negative impact of government financing is likely to exceed the positive impact on economic growth.”

In order to stimulate the U.S. economy, Barack Obama has agreed with the Republican Party decided to extend to all sectors of the Bush tax cuts during the two years and workers will be cut in 2011 of personal income tax, and extending the maturity of the business tax relief, such as R & D tax concessions. Many analysts said the tax cuts because the policy proceeds with large surface areas, so in the Senate and House of Representatives passed a great possibility. Obama 13, also said that tax cuts passed in the Senate procedural vote, this result shows that is Republicans and Democrats can work together, the middle-class tax cut agreement is a significant victory, he urged the House of Representatives quickly to tax-cut plan vote.

Outline of Japan tax reform in 2011 will be released today. According to Japanese media, Japan’s finance minister and the national strategy to play wild Tianjia Yan Yuen Minister Koizumi leaves in corporate tax to the Government’s proposal to cut 3% or 5%, Japanese Prime Minister Naoto Kan, 13, closed, decided to have dropped to 5%. New rates will begin in April 2011 the new fiscal year began. In most of the time became the Japanese Prime Minister, Naoto Kan, has been struggling with falling prices and a stronger yen to do fight, and whether the magnitude of the tax reform which has been the Japanese community is the focus of debate. Japan’s Economic Planning Association, said last week, due to waning impact of economic stimulus measures, economic growth in the fourth quarter of this year, may decline. The latest data showed Japan’s economy worrying, though exports in October rose 7.8%, but it is the slowest growth rate this year, industrial output continued to decline in the first five months, while the unemployment rate rose to a high of 5.1%.

Many officials believe that the Japanese in order to better stimulate economic growth, reduced corporate income tax rate is essential for effective measures to reduce the tax burden of these can be used to increase domestic investment, expand employment and increase in salary to help Japan out of deflationary state. Including tax and local taxes, including, Japan, the actual current rate of corporate tax is about 40% in developed countries top. Japanese business community that high corporate tax rates affect the international competitiveness of Japanese companies. METI 8th of this month clearly wants to cut corporate taxes by 5 percentage points. Naoto Kan, said late in the 13th, cutting the company tax is to “stimulate economic growth and fight deflation.” In fact, in this year’s campaign platform Naoto Kan, the tax cuts on economic growth is one part of plan. “This is Naoto Kan, the work done since he took office one of the positive issues.” JP Morgan senior economist at the Ada Qi 14, said that this will help Japanese companies to develop and benefit the Japanese employment. The Japanese business community also said the Japanese government cautiously welcomed the tax cuts, but calls for a government needs more support to help create jobs and compete with regional rivals.

Recently, the United States and Japan to stimulate domestic economic growth can be said to spare no effort. In addition to super-loose policy between the two countries central banks incredible efforts, the two governments in the fiscal stimulus measures are also accompanied by the line. Analysts believe that the momentum of economic recovery in the face of weak, short-term stimulus measures in developed countries is not only not disappear, there may be further counter. This is of course conducive to economic recovery, but it will result in bad debt already developed further deterioration. Moody’s pointed out that Obama’s tax cuts and Republican leaders reached a compromise deal could push up the level of debt, increase the next two years the United States the possibility of a negative rating outlook. If the United States set the tone for the negative rating outlook, the U.S. credit rating is likely in the next 12 to 18 months to be cut. Moody’s expects the Obama administration’s tax cuts and the cost of unemployment benefits and other measures will be 700 billion to 900 billion U.S. dollars between the accounts of government debt that will increase the percentage of GDP to 72-73 percent. Last week, Obama announced a tax cut, U.S. Treasury prices fell sharply, bond yields rose to 6-month high, an indication of U.S. concerns about the level of debt is increasing.

As for the debt level has been ranked first in the world of Japan, by the potential tax revenue has shrunk even more is a huge challenge. According to the Government of Japan expects 5% corporate tax cut could lead to the Japanese government’s revenue declined from 1400 to 2100 billion yen or so. Japan’s Chief Cabinet Secretary Paradise Valley 14, said by people in Japan through better monitoring of financial management strategies to be sure that the necessary revenue in Japan, he Naoto Kan also reiterated earlier assurances that Japan’s national debt will not exceed the previous 44.3 trillion yen is expected to record levels. The Finance Minister is also the same day of wild Tianjia Yan said the government would do its utmost to make up for the reduction of corporate tax revenue brought about losses.

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