LDP Presidential Election Starts: Measures against High Prices Are Not Sufficient

Editorial

15:00 JST, September 23, 2025

If they are truly determined to take the helm of the government, they should present medium- to long-term economic and fiscal policies. The current situation in which they focus solely on immediate measures against high prices is unsatisfactory.

Official campaigning for the Liberal Democratic Party presidential election has begun, with five of the party’s lawmakers filing their candidacies.

Of the five candidates, former economic security minister Takayuki Kobayashi, former economic security minister Sanae Takaichi and Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi have strongly emphasized tax cuts in their economic policies.

Kobayashi has proposed implementing a flat-rate tax cut, deducting a fixed percentage from income tax, for about two years.

A flat-rate tax cut was first implemented in 1999 at the time of the Cabinet of Prime Minister Keizo Obuchi, and it continued for about eight years. While it increased take-home pay for those in working generations, it also worsened the government’s fiscal condition.

Takaichi advocates introducing a “tax credit with cash payments” system that would combine direct cash payments and income tax cuts.

This would reduce taxes for those with certain levels of income and distribute cash to those with lower tax bills who would not benefit from the tax cut. While this system is considered effective for supporting low-income individuals, it faces many issues such as the need to determine individual incomes.

Koizumi has emphasized revising the mechanism of the “annual income threshold” at which income tax begins.

Regarding the income threshold for taxation, it was decided during the previous ordinary Diet session to raise the minimum taxable income from ¥1.03 million to ¥1.60 million. Koizumi calls for the minimum taxable income to be adjusted up or down according to fluctuations in prices and wage levels.

Meanwhile, former LDP Secretary General Toshimitsu Motegi proposes distributing new subsidies to local governments to deal with rising prices. However, the government had distributed subsidies to local governments many times in the past, but wasteful spending of such subsidies was frequently observed.

Unlike the four candidates who emphasize tax cuts and expansionary fiscal spending, Chief Cabinet Secretary Yoshimasa Hayashi called for the creation of a roadmap to make social security sustainable as a pillar of his pledges. This call can be seen as Hayashi’s typical way, as he is known as a person calling for fiscal discipline.

A prolonged period of high prices is squeezing household budgets. There is no disagreement about implementing support measures for such people as low-income individuals.

However, what is important is how economic growth that enriches people’s lives and leads to stable tax revenue increases can be concretely achieved. The candidates must compete with one another by discussing growth strategies in the presidential election.

The issues are not limited to domestic matters. There is no sign of Russia’s aggression against Ukraine coming to an end. Israel is killing large numbers of civilians in the Palestinian territory of Gaza.

Given its commitment to peace and the rule of law, Japan should exert greater efforts for peace and stability in the international community. The candidates must deepen the debate on foreign and security policies, too.

(From The Yomiuri Shimbun, Sept. 23, 2025)