Decision Postponed On Tax Breaks for Startups, No Hike in Corporate Tax
RE attracting foreign labor force: moving to Japan for work might be interesting primarily for specialists from developing and less-off countries, for who it is traditionally hard to attain Japanese visa. Notwithstanding reluctance of many Japanese firms to get involved with gai-jins, IT firms are rare exception though. I know many people who graduated Waseda and other prime Japanese universities, yet they unable to get visa. In your article you're not elaborating on it and even noted that it is sorted out issue, with which I'd disagree.
Richard: I enjoy reading your thoughtful posts. One note on this one, however: $400K is roughly the average total angel round size in the US (i.e., the sum of all investments made in the angel financing round) and not the average size of each individual investment in an angel round. $100K per year as a tax writeoff for angel investments is not bad in my opinion, though raising the limit wouldn't hurt.
Corporate tax rates need to come below that global average before Japan will see better growth. I believe they need to be below 20%.
The more hierarchical a society is, the more people feel helpless and this leads to fatalism and apathy.
This is the predictable outcome, when you have a one-party "democracy" run by and for corporate interests where the people are apathetic and disengaged, and have long since surrendered aspirations for civil rights, democracy or self-realization for a job that forces them to expend all of their psychological energy avoiding putting a foot wrong or causing offense, and a vague promise of things not getting too much worse too fast, as long as they toe the line.
Richard, once again most all your points are spot on. Japan has long favored its National Champions -- Large companies doing the countries bidding. I have followed Japan from some 30+ years and the country has never show a great interest or willingness to create policy that promotes start-up companies.
I still believe one of the largest issues is legal -- Until Japan writes a reasonable bankruptcy law the risks involved in starting a company are too great for most people.
The one area that I think you are dead wrong on is corporate taxation! Until the effective corporate tax rate is below 20% Japan will have issues competing internationally! It has been proven here in the US that reductions in corporate taxation result in stronger companies. This results in employees earning better incomes and greater investment. The fact that this hasn't taken place in Japan is a strong sign that there are many other issues. None of these issues will be solved by increasing corporate taxes. First, it will slow growth, thus limiting increases in revenue. Second, the Japanese government has proven to be as bad or worse than other governments at reallocating "the peoples' money."