Japan’s Rural Towns Are Luring Tax From Tokyo With Beef and Beer
January 13, 2017 10:09 AM Subscribe
In Japan, you can designate a "hometown" to send a portion of your taxes to. The program is intended "to help rural areas struggling with falling populations and shrinking revenues." Then someone realized that you don't have to designate your actual hometown, and that those rural areas can lure in tax money by rewarding people with local goods. Think of it as the NPR totebag of the Japanese tax system. Of course, that means that people's actual living spaces lose out on the tax revenue.
I would think this is a flaw in human nature more than unregulated capitalism itself.
posted by any portmanteau in a storm at 10:28 AM on January 13, 2017 [4 favorites]
posted by any portmanteau in a storm at 10:28 AM on January 13, 2017 [4 favorites]
Being unable to cope with something intrinsic to human nature (should such a thing exist) would be a pretty massive flaw in a system of economic organisation, I think.
posted by howfar at 10:38 AM on January 13, 2017 [11 favorites]
posted by howfar at 10:38 AM on January 13, 2017 [11 favorites]
This is pretty amazing.
posted by corb at 10:40 AM on January 13, 2017 [1 favorite]
posted by corb at 10:40 AM on January 13, 2017 [1 favorite]
Ugh, I've wanted to do this for years, but I don't live in Japan. I'd love a bag of rice, some nice beef, or some interesting item from a random prefecture.
posted by Ms. Moonlight at 10:48 AM on January 13, 2017 [3 favorites]
posted by Ms. Moonlight at 10:48 AM on January 13, 2017 [3 favorites]
I don't understand why the prefectures get access to personal data about tax payers. If the system was anonymized then there'd be no ability to offer goods in return for these tax payments.
posted by GuyZero at 10:57 AM on January 13, 2017 [6 favorites]
posted by GuyZero at 10:57 AM on January 13, 2017 [6 favorites]
I'd love a bag of rice, some nice beef, or some interesting item from a random prefecture.
Maybe Japan just needs a national mandatory Secret Santa program.
posted by GuyZero at 10:58 AM on January 13, 2017 [14 favorites]
Maybe Japan just needs a national mandatory Secret Santa program.
posted by GuyZero at 10:58 AM on January 13, 2017 [14 favorites]
Japan Times has a lot more information on this in an article from 2014, noting that the donations "almost" offset taxes so it's not a 1:1 transfer, and Tokyo isn't really hurting because this decrease represents a tiny percentage of the total taxes received. The article also states that :
Really, this is pretty smart. As urban centers continue to draw people in from rural areas, those communities have less and less to support their remaining populations, so the communities continue to spiral down. This sort of "donor support with incentives" can both bolster local production and directly increase funding for civic needs. This sort of system could even support new businesses who look to market local attractions in areas without existing exportable products, or products that aren't as broadly attractive as beer and beef.
posted by filthy light thief at 11:28 AM on January 13, 2017 [6 favorites]
Tokamachi, Niigata Prefecture, allows donors to decide what particular policies or projects they want their money to aid, such as creating a more elderly-friendly society, boosting efforts to preserve nature, or promoting sports and arts-related activities.Which sounds doubly awesome, but I hope there is something in place to cap how much goes to one program, should sports support get the bulk of the funding, while elderly support is in dire need of additional funds for a new facility.
Really, this is pretty smart. As urban centers continue to draw people in from rural areas, those communities have less and less to support their remaining populations, so the communities continue to spiral down. This sort of "donor support with incentives" can both bolster local production and directly increase funding for civic needs. This sort of system could even support new businesses who look to market local attractions in areas without existing exportable products, or products that aren't as broadly attractive as beer and beef.
posted by filthy light thief at 11:28 AM on January 13, 2017 [6 favorites]
If by "unregulated capitalism" you mean "a regulation specifically intended to create this particular outcome", then sure. But that's a rather absurd way to define "unregulated capitalism".
I should have been a clearer (although it seems clear that the regulation is not, in fact, designed to produce this specific outcome). This illustrates, to me, very clearly why the notion that people are always best placed to determine how and where to spend their money is a wrong, even with regards to their own interest. The fact that people will say "you know what, fuck my personal interest in a working societal infrastructure, I'm gonna get me 24 ten dollar bottles of beer instead" is a pretty stark illustration of the reasons why, unpleasant though it is, we still need governments that interfere with our liberty to make that choice.
posted by howfar at 11:33 AM on January 13, 2017 [3 favorites]
I should have been a clearer (although it seems clear that the regulation is not, in fact, designed to produce this specific outcome). This illustrates, to me, very clearly why the notion that people are always best placed to determine how and where to spend their money is a wrong, even with regards to their own interest. The fact that people will say "you know what, fuck my personal interest in a working societal infrastructure, I'm gonna get me 24 ten dollar bottles of beer instead" is a pretty stark illustration of the reasons why, unpleasant though it is, we still need governments that interfere with our liberty to make that choice.
posted by howfar at 11:33 AM on January 13, 2017 [3 favorites]
The gifts seem to originate in the province receiving the taxes. So it's as if a portion of the taxes are set aside for a subsidy to a specific local business. It might not be ideal (I'd certainly rather be the prefecture governor whose local product is beer than the one whose local product is natto), but it seems better than just keeping all the money concentrated in Tokyo and letting rural areas die a slow death?
posted by tobascodagama at 11:40 AM on January 13, 2017 [2 favorites]
posted by tobascodagama at 11:40 AM on January 13, 2017 [2 favorites]
Sure, but governments make the very same kind of decisions every day. It is quite rare that politicians prioritize some long term goal over short term gains.
posted by any portmanteau in a storm at 11:42 AM on January 13, 2017 [4 favorites]
posted by any portmanteau in a storm at 11:42 AM on January 13, 2017 [4 favorites]
tobascodagama: So it's as if a portion of the taxes are set aside for a subsidy to a specific local business.
Which keeps the local business in business, keeps its employees employed, and keeps all that supporting the local economy. It's trickle down, but in a more tangible way. There are lots of local incentives to start and keep local businesses for the exact same reason, but this is funding those subsidies with donations, instead of other taxes.
posted by filthy light thief at 11:47 AM on January 13, 2017 [2 favorites]
Which keeps the local business in business, keeps its employees employed, and keeps all that supporting the local economy. It's trickle down, but in a more tangible way. There are lots of local incentives to start and keep local businesses for the exact same reason, but this is funding those subsidies with donations, instead of other taxes.
posted by filthy light thief at 11:47 AM on January 13, 2017 [2 favorites]
Why don't they just set up transfer payments like Canada does, where they have a formula that transfers money from richer regions to poorer ones, with the express purpose of ensuring all citizens have a similar level of support?
posted by Canageek at 12:39 PM on January 13, 2017 [9 favorites]
posted by Canageek at 12:39 PM on January 13, 2017 [9 favorites]
it seems better than just keeping all the money concentrated in Tokyo and letting rural areas die a slow death?
Why? I'm not being sarcastic - if people don't want to live there why should there be infrastructure there?
posted by PMdixon at 1:28 PM on January 13, 2017
Why? I'm not being sarcastic - if people don't want to live there why should there be infrastructure there?
posted by PMdixon at 1:28 PM on January 13, 2017
Because people do live there, they just don't have enough money to pay for the infrastructure on their own.
posted by tobascodagama at 1:54 PM on January 13, 2017 [5 favorites]
posted by tobascodagama at 1:54 PM on January 13, 2017 [5 favorites]
Why? I'm not being sarcastic - if people don't want to live there why should there be infrastructure there?
Because per capita to achieve the same level of residential services is far lower in crowded areas.
posted by Talez at 1:56 PM on January 13, 2017 [2 favorites]
Because per capita to achieve the same level of residential services is far lower in crowded areas.
posted by Talez at 1:56 PM on January 13, 2017 [2 favorites]
PMdixon: "I'm not being sarcastic - if people don't want to live there why should there be infrastructure there?"
Cynically these places have a tendency to be where a lot of food comes from. A little less cynically these places tend to support a lot of tourists and having roads, water, electricity, healthcare, and facilities to support that tourism would be appreciated by tourists.
posted by Mitheral at 4:01 PM on January 13, 2017 [2 favorites]
Why don't they just set up transfer payments like Canada does, where they have a formula that transfers money from richer regions to poorer ones, with the express purpose of ensuring all citizens have a similar level of support?
Japan ***does*** do this very same thing. But Canada and Japan have the same problem: regions where there is dramatic, dramatic population decline. In Canada it is the entire Maritimes region. On top of that there is an oil bust in Canada. The transfers in Canada ensure there is a basic minimum level of service across Canada, notably for healthcare. Transfers in Canada cannot and do not account for population decline and poor economic conditions.
Just like in Japan. Population decline, aging populations and decayed industrial base is a structural problem that cannot be fixed with wealth transfers like we have now.
Anyway, I think it's an interesting concept, with marginal returns (it's not a huge amount of revenue for Japan's regions).
Tokyo is not going to hurt because of this. It might as well be its own country. It is rich, productive, young, with a growing population.... of people leaving the regions because there is no work (unless you want to work in food processing or in a call center).
That said, Japan's rural / regional economy is massively more interesting than Canada's regional economies. There is so much more going on in Kumamoto compared to Prince George or Nanaimo.
That's where Japan gets it right every single time compared to Canada. Canada has *a lot* to learn from Japan about regional economic development. We're a second-world economy in many ways.
posted by My Dad at 4:21 PM on January 13, 2017 [5 favorites]
Japan ***does*** do this very same thing. But Canada and Japan have the same problem: regions where there is dramatic, dramatic population decline. In Canada it is the entire Maritimes region. On top of that there is an oil bust in Canada. The transfers in Canada ensure there is a basic minimum level of service across Canada, notably for healthcare. Transfers in Canada cannot and do not account for population decline and poor economic conditions.
Just like in Japan. Population decline, aging populations and decayed industrial base is a structural problem that cannot be fixed with wealth transfers like we have now.
Anyway, I think it's an interesting concept, with marginal returns (it's not a huge amount of revenue for Japan's regions).
Tokyo is not going to hurt because of this. It might as well be its own country. It is rich, productive, young, with a growing population.... of people leaving the regions because there is no work (unless you want to work in food processing or in a call center).
That said, Japan's rural / regional economy is massively more interesting than Canada's regional economies. There is so much more going on in Kumamoto compared to Prince George or Nanaimo.
That's where Japan gets it right every single time compared to Canada. Canada has *a lot* to learn from Japan about regional economic development. We're a second-world economy in many ways.
posted by My Dad at 4:21 PM on January 13, 2017 [5 favorites]
“Hometown dues,” The Economist, 18 April 2015
“In Japan, You Get a Tax Break and a Side of Lobster and Beef” Jonathan Soble, The New York Times, 30 May 2015
posted by ob1quixote at 10:56 PM on January 13, 2017 [2 favorites]
“In Japan, You Get a Tax Break and a Side of Lobster and Beef” Jonathan Soble, The New York Times, 30 May 2015
posted by ob1quixote at 10:56 PM on January 13, 2017 [2 favorites]
As an addendum to my earlier comment, broadly speaking, most OECD countries more or less wield the same tools to address regional economic development, such as transfer payments, de facto or otherwise.
In other words, and this is something I have always believed, OECD countries and liberal democracies have (or had, until November, 2011) more commonalities than differences, and this includes Japan. Very little difference, at least in terms of policy, between Japan and Canada, for example.
posted by My Dad at 10:57 AM on January 24, 2017
In other words, and this is something I have always believed, OECD countries and liberal democracies have (or had, until November, 2011) more commonalities than differences, and this includes Japan. Very little difference, at least in terms of policy, between Japan and Canada, for example.
posted by My Dad at 10:57 AM on January 24, 2017
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posted by howfar at 10:17 AM on January 13, 2017 [4 favorites]