DPP Triumphs in Election with Focus on Taxes

Japan's political landscape is undergoing a significant transformation following the Liberal Democratic Party's (LDP) recent electoral setbacks. As the LDP grapples with declining support, smaller parties like the Democratic Party for the People (DPP) have gained traction.

In this context, political and economic commentators provide insights into the LDP's defeat and the lackluster performances of established parties. Highlighting the DPP's impressive gains in seats and voter backing, they point out that the emerging focus is less on old party rivalries. Instead, they suggest, it centers on the electorate's concerns about the economy and taxation.

LDP's Proportional Decline

The Japanese electoral system comprises two types of seats. One type involves candidates being elected to represent specific geographic districts. This allows voters to select their representatives based on local concerns and issues.

In the other, it is divided into larger proportional representation districts where seats are allocated to each party based on its share of the vote. For instance, a party winning 30% of the overall votes in a district would receive roughly 30% of that district's proportional representation seats.

October 27 was a sobering day for the LDP. In the Lower House election, it lost approximately 5.33 million votes compared to its 2021 total, dropping to 14.58 million — a 26.8% decline. This shift brought its vote count in the proportional representation category down to the 14-million range for the first time since the 2010 Upper House election.

Disappointment, Qualified Victories

Many Japanese media outlets celebrated the Constitutional Democratic Party of Japan's (CDP) results. It secured 148 seats — an increase of 50 from its previous count. However, it only received a modest 0.6% rise in proportional votes. The party received 11.56 million votes, barely higher than the 11.49 million votes it garnered in 2021. Essentially, the CDP capitalized on narrowly winning in key, closely contested single-member districts where it directly faced the LDP. 

Unfortunately for Komeito, its proportional vote count dropped from 7.11 million in the 2021 election to 5.96 million — a decrease of 1.14 million votes. This decline has been steady since a high of 8.98 million votes in the 2005 election. Moreover, Komeito's leader, Keiichi Ishii, lost his seat and announced his resignation. Komeito will elect his successor at an extraordinary convention on November 9.

Similarly, the Japanese Communist Party (JCP) saw its vote count shrink from 4.16 million votes in the last election to 3.36 million. That represented a loss of 800,000 votes. Earlier in 2024, the JCP drew attention by exposing a slush fund scandal involving LDP members. However, this coverage failed to translate into increased electoral support. With much of its voter base aging, the party's primary challenges stem from a shrinking membership. A steady decline in readership for its newspaper, Shimbun Akahata, is another issue for the JCP.

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DPP Success

So, who were the real winners? The DPP saw the most significant growth, capturing 28 seats and quadrupling its previous seat count. Its proportional vote count jumped from 2.59 million in 2021 to 6.17 million, representing a surge of over 240%.

Political commentator Yosuke Naito analyzed the reasons behind this surge in an October 29 broadcast. "Many voters are less concerned about political scandals," he suggested. "They are more concerned about whether the government intends to raise taxes or ease the burden [on households]."

During a news program on October 29, economist Takuro Morinaga also discussed the factors contributing to the DPP's increased popularity. "The thing people probably care about most is improving their take-home pay and other economic matters," he said. "However, the LDP is so focused on the slush fund issue. Even the CDP has made the scandal its primary agenda." This, he claimed, indicates that both the LDP and CDP are "out of touch with ordinary citizens" and "public concerns."

Reforming Taxes

Indeed, the DPP advanced several bold tax and economic policy proposals as part of its election promises:

1. Raising the Tax Exemption Limit: DPP aims to remove the ¥1.03 million JPY annual income cap (approximately $6,740 USD), which limits income tax deductions. It proposes raising the income tax deduction threshold from ¥1.03 million to ¥1.78 million. According to DPP leader Yuichiro Tamaki, this would "expand the deduction by ¥750,000, resulting in a tax reduction of ¥132,000 ($860) annually for someone earning ¥5 million yen" ($32,700).

2. Gasoline Cost Relief: To alleviate the burden of high fuel costs, DPP pledges to lift the freeze on the "trigger clause," which would lower gasoline taxes. Under the trigger clause, the government takes special measures to reduce gasoline taxes when gasoline prices exceed ¥160 per liter ($1.05) for three consecutive months.

3. Consumption Tax Reduction: DPP is also advocating reducing the consumption tax rate from 10% down to 5%.

Tamaki stresses that the DPP is not interested in merely gaining cabinet posts. Instead, it aims to "increase take-home pay" and "enrich the people's pockets through effective economic policy."

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The Pro-Tax Coalition

Naito highlighted a shared policy stance among major Japanese parties. "Komeito, the LDP, and the CDP all share a pro-tax increase stance," he noted. These party leaders generally advocate for raising taxes on the working population to fund benefits for the elderly. He explains that "Prime Minister Shigeru Ishiba's platform caters to this (elderly) demographic." Ishiba largely secured his support from regional and older voters rather than from urban, working-age populations, he says.

Within Komeito, some candidates downplay the tax burden on younger people. "They argue that it's not that heavy while continuing to push for expansive social security measures for seniors," Naito elaborates. He mentions that in a debate with Ishin no Kai's Shun Otogi, Komeito members maintained that "young people's tax burden isn't a serious issue."

In the CDP, leaders like Yoshihiko Noda and Secretary-General Katsuya Okada are also strong advocates for tax hikes. Okada proposed that income tax rates could go as high as 70-80%. Naito states, "This pro-tax coalition ― LDP, Komeito, and CDP — advocates for these measures."

Taxation Tensions

Morinaga elaborated on the economic context of the DPP's success. He stated, "If you compare now to 1988 before the consumption tax was introduced, even without adjusting for inflation, real take-home pay has declined. There's no other country like this." Morinaga concluded, "When people are worse off than they were over 30 years ago, it's no surprise they're furious."

Reflecting on Japan's recent political past, Naito calls the 2009 coalition with the CDP "a painful, nightmarish period" due to the increase in consumption tax. He warns that this experience foreshadows what may come if the current pro-tax coalition takes hold.

Naito emphasizes that today's political landscape is not just about the ruling versus opposition parties. Rather, "the current political battle is about tax-increase supporters versus opponents." Currently, the LDP and Komeito hold the ruling seats while the CDP sits in opposition. However, "the real question is whether to increase taxes and expand public burdens or to hold off and reduce them," Naito concludes.

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• LDP Coalition Loses Majority in Lower House Election for the First Time in 15 Years
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Author: Daniel Manning