The Liberal Democratic Party (LDP) leadership election, announced on September 12, has generated unprecedented excitement and attention, with a record nine Diet members running as candidates. As of this writing, it remains unclear who will succeed Prime Minister Kishida. However, the candidates are having debates almost daily, and I find it encouraging to witness such active discussions.

 First, let’s consider why as many as nine candidates were able to run in this election. The large number of candidates suggests that the hurdle for running for leadership was much higher in the past. While the requirement to secure 20 endorsers hasn’t changed, it appears that obtaining these endorsers has become easier. This suggests that in previous elections, securing endorsers was difficult because, from the endorsers’ perspective, the perceived risk of endorsing a candidate was likely higher.

 Needless to say, the faction system—until recently, there were six factions—has been a key factor behind this. Although I don’t fully understand how the system works, it’s become clear that these factions played a role in distributing financial resources, which led to the recent movement toward dissolving them. In other words, it’s reasonable to assume that factions provided various forms of support to ensure the long-term political stability and viability of their members (which may also explain why prominent second-generation politicians often feel less need to belong to a faction). In exchange for this support, politicians were likely expected to align their actions and decisions with those of their faction.

 In this election, though, the dissolution of five factions has granted individual politicians greater freedom in decision-making, resulting in the large number of candidates running for leadership. At first glance, this might seem like a positive change, as it allows politicians to act based on their own beliefs, but is that really so?

 The reason I question this is that, as I mentioned earlier, with the dissolution of factions, the support that factions provided to individual politicians has also disappeared. For many politicians who neither come from a family of prominent politicians nor have strong local support or widespread recognition, will they truly base their decisions on their own political beliefs this time? It seems more likely they will choose what they believe is the optimal decision—or what they think will increase their chances of winning the election—by backing the winning horse. This kind of behavior can also be seen in the actions of those who chose not to run.

 Hence, the dissolution of factions does not necessarily mean that our political system will improve or that society will be better off. On the contrary, it may lead to a greater concentration of power at the top, which the factions had previously helped to balance. I find this somewhat concerning.

 The debates among the candidates are intensifying, with key issues such as separate surnames for married couples and worker dismissal regulations being heavily discussed. These are certainly important topics, and the latter, in particular, is something we can no longer ignore when considering the revitalization of the Japanese economy. However, since these issues are widely reported, I’ll leave it to you to follow the news for further details.

 An issue I find both distinctive and important is Trao Kono’s campaign pledge to abolish the year-end tax adjustment and require all taxpayers to file tax returns. While this proposal hasn’t received much attention, I fully support it. This isn’t about reducing the burden on companies. Salaried workers don’t calculate their own take-home pay after taxes and social insurance premiums are deducted. In other words, the withholding tax system essentially keeps people unaware of how much they pay in taxes and social insurance, which I believe is a problem.

 Since many salaried workers focus only on their take-home pay, they are less likely to develop an awareness of whether the social costs deducted from their salaries are being used appropriately. I believe this lack of awareness is a major factor behind their disengagement and disinterest in politics. If individuals had to calculate for themselves, once a year, how much income they earned, how much tax they paid to national and local governments, and how much they contributed to healthcare and pensions, they would feel the burden of social costs more personally. Additionally, since social insurance premiums are split between employer and employee, the employer would not have to pay this amount if they did not employ that individual. In other words, social insurance premiums can be considered part of the salary. The total amount paid in social insurance premiums for a salaried worker is double what the employee sees deducted from their paycheck.

 I have shared my view that Taro Kono’s proposal to abolish the year-end tax adjustment and require all taxpayers to file tax returns is an excellent idea for raising political awareness. However, the discussion around this proposal seems to be focused solely on concerns about the increased burden on citizens and government offices, which I find very disappointing.

Hirotaka Shimizu
Chairman and CEO
Kamakura Shinsho, Ltd.