Edmond-Club-ET24

Ishihara’s First Defeat?

     Shintaro Ishihara, Governor of Tokyo, greatly shocked the world on February 7, 2000.
He suddenly announced with complete self-confidence that the Tokyo Metropolitan
Government was going to collect a local tax from major banks in Tokyo. The rate of the
tax was to be 3%, which was called ginko-zei or bank tax. Ishihara forced his policy to
lay a tax on banks into practice with the support of public opinion. At that time, both
Japanese people and the mass media had painted a lurid picture of the banks, though, to
tell the truth, the banks are still treated in the same way as before. Most citizens of Tokyo
used to be on Ishihara’s side; besides, the Metropolitan Assembly had supported his
policy almost unanimously. Ishihara began to collect a tax from banks from May 2001.
     However, the bank tax had a lot of difficult problems. The biggest one was that the
bank tax by Ishihara was an unequal taxation system that hit only megabanks. As a result,
the Japanese Bankers Association was positively against Ishihara’s taxation policy, and
they started a lawsuit against the Tokyo Metropolitan Government. After all, the
Government lost its suit in the first and second trials (March 26, 2002 and January 30,
2003). Probably, Ishihara’s winning the case will be extremely doubtful even in the
Supreme Court. He made a speech in February 2003 that he would like to ask for the
judgment of the Supreme Court. However, he proposed a plan to settle the matter out
of court because Tokyo is now hard up for money, and it may lose the suit. In the case
of banks, they are also hard up for money and they are not necessarily sure to win their
case, so banks reconciled with the Tokyo Metropolitan Government on September 17,
2003. The suit between Tokyo and the banks has finished after three years of legal
proceedings.
     By the way, what meaning did this suit about the bank tax by Ishihara have? Do you
know a Japanese idiomatic expression “match-pump,” which means that the person
concerned lights something with his or her match and then puts out the fire with his or
her own pump? That is, Ishihara both made a disturbance and resolved his quarrel by
himself. According to a certain newspaper, an executive of the Tokyo Metr
opolitan
Government did not understand what the disturbance three years ago was. As the
Tokyo Metropolitan Government collected 317.3 billion yen from thirty banks for three
years, it has to return 234.4 billion yen (including a fine) to them. After all, Tokyo will
have no means of financing 400 billion yen in the next fiscal year.
     Who will be responsible for this unreasonable uproar, then? Finally, the severe
burden of 400 billion yen will be imposed on all the citizens of Tokyo. Both the Tokyo
Metropolitan Government and the Japanese Bankers Association chose actual results
rather than formal requirements. In the long run, the moral obligation of the suit simply
faded from public awareness without any clear resolution. Therefore, the Japanese
Bankers Association should not have dropped the suit until it won. No matter which
side won, the Japanese Bankers Association should bring the lawsuit to an end because
Ishihara’s policy of imposing the tax only on major banks in Tokyo was the problem of
equality in business. Generally speaking, Ishihara’s political attitude is to bully the weak
in a forcible way. Although opinion is still divided on whether banks are weak or not, it
is true that they have been treated as bad fellows in Japan. Although all the banks are
not righteous, is it reasonable that they are discriminated against in a system of taxation?
Maybe, Ishihara thought that continuing the suit was not advisable because of various
things, including even his lost case in the Supreme Court. So he wanted to compromise
with banks. If so, the reconciliation of this time would obviously be Ishihara’s defeat,
and it can be considered his first defeat as the Governor of Tokyo.