Regular, High Octane, or Total Confusion?

Recently I got a letter from the IRS (yes, even here in Japan). Actually, it was good news; it said that I will likely qualify for a tax rebate...even though I haven't had to pay U.S. taxes for almost twenty years! Yes, the letter actually said as much almost in those very words. It's part of the Economic Stimulus Package recently signed by President Bush. (I couldn't help but notice that they also made careful note of that last tidbit in the letter...during Election Season. But anyway...) I mean, it's all well and good for Uncle Sam to be handing some of its dough back to its masses as a way to try to get people to spend more money and, in theory at least, try to stimulate the sagging economy. However, when I hear stories of U.S. troops in Afghanistan and Iraq having to depend on donations for things like soap, blankets, chocolate, and body armor, it seems ridiculous for me to receive a check in the mail in hopes that I'll run out and buy things at American stores when I live in Japan! (Or will there be a stipulation attached that I can only use it at Costco?) That puts a rather interesting burden of conscience on me. Oh, well. You can't blame the government for trying to solve the economic problems.

What's really interesting is that a similar economic stimulus "measure" in the form of a tax cut is now occurring in Japan, only it happened by accident. You see, for the past thirty years a law has been in effect allowing the government effectively to double the standing tax rate on gasoline with all revenue thus generated earmarked for road construction. The ruling "Liberal Democratic Party" (which is really conservative, elitist if not royalist, and fractured) still maintains that that extra funding is needed for at least another decade in order to bring Japan's road system up to par with its needs. However, the last extension of that law was due to expire at the end of the last fiscal year, i.e. on March 31. Moreover, the (liberal) opposition Democratic Party of Japan, which currently controls the Upper House of the Diet, refused to approve a new extension. Their reasons for doing so were:

1. Dropping the extra tax would greatly offset the rising price of gasoline,
2. Reduced gas prices would help the Japanese economy, which is still just coming out of a prolonged recession,
3. A lot of the revenue earmarked for road construction was really going into needless pork projects if not the pockets of corrupt officials anyway,
4. Making Prime Minister Fukuda look like a wimp if not a total loser could force an early election in the more powerful Lower House with the LDP administration on the losing end, giving the (liberal) opposition a greater chance of gaining control of the government.

PM Fukuda wrangled, debated, discussed, lectured, and finally out and out whined, but all in vain. The opposition wouldn't budge on the issue, and the tax increase quietly expired at midnight on March 31.

I know what some of you are probably thinking. The liberal opposition cut taxes? Over the objections of the conservatives?? WHAT??? You'd think it would qualify for an episode of the Twilight Zone. (doo doo doo doo - doo doo doo doo...) However, that was nothing compared with the craziness that followed during the first week of this month.

On one hand, local governments, who had only just finalized their budgets assuming the increased tax would still be in effect, suddenly found themselves entering the new fiscal year facing a nasty revenue shortfall. The government department in charge of building and maintaining the national highway system was told its allotted funds for the following year will maybe wind up billions of dollars less than expected. Meanwhile, many gas stations quickly put up signs saying, "The tax cut does not mean prices will immediately drop," only to see their competitors lower their prices...and wind up with LONG lines of people eager to take advantage of an average reduction of around 20 yen per liter (about 75 cents a gallon at the current exchange rate). Many gas stations decided to avoid either possibility by simply eliminating their price signs completely, meaning customers wouldn't know how much they'd be paying till they pulled up to the pump. The result was a brief but totally insane price war until things finally settled into an equilibrium again based on the new, lower rate.

And to think I'd only just gotten used to the fact that most gas stations here are now automated, vending-machine-style, self-service types! Hey, being from Oregon (where self-service gas is, to my knowledge at least, STILL illegal), I had never pumped my own gas in my life till just a couple of months ago! Now I'm suddenly pumping it a LOT cheaper than before! And! (?)

I can't say that I'm complaining, but I am a bit worried about what local governments and the highway department are going to do with the reduced funds. Are they finally going to tell the bribe-paying construction companies to stuff it, knock off all those nauseating pork projects, and just concentrate on what's really needed? Our survey says: "BAAAAAH!!!!"

Another Reason to Love Ibaraki

Oil prices have jumped up again. Gasoline at our local stations went up 8 yen a liter (about 25 cents a gallon) last week. Diesel now costs as much as gasoline did last year. Yes, it's a worldwide problem that looks to get a whole lot worse before it gets better. However, there is a speck of brightness in all of this.

Not long after the gas price jump, the news media did some investigating and comparing. Guess what: Ibaraki Prefecture currently has the lowest average gasoline prices in the entire country. I'm sure part of the reason stems from the fact of the Kashima Petrochemical Kombinat over in Kamisu having some of the largest refining facilities in Japan. However, the news interviewed some gas station workers and owners and found that many of them had conferred among themselves and agreed to keep prices to a minimum, even if it meant a loss of revenue, out of concern for their customers.

Evidence of cartelism? Probably. But I'm not going to complain. And this is here in Ibaraki, the prefecture which has perhaps the worst reputation for being ill mannered. Then again, that just might be the gruff-sounding local dialect. ;-)


(Image links to source page, www.mapzones.com.)