Thank goodness Prime Minister Junichiro Koizumi has finallystopped wasting everyone's time with his privatization schemes and has begun to focus on what really matters-tax cuts. Aggressive tax cuts are being seriously considered in Tokyo, and if they are passed into law the results could be spectacular. In a best-case scenario, Japan's economy could grow by as much as 6% next year. Former President Ronald Reagan is often celebrated in Japan, but his successful economic policies are rarely understood. The heart of Mr. Reagan's economic strategy was a combination of big tax cuts-the capital-gains tax rate was cut in half and he eventually reduced the top income-tax rate to 28% from 70%-and a strong-dollar policy to solve the inflation problem of the previous decade. The two-part cure was finally put in place in 1983, and by the end of that year the U.S. economy had grown by 7.6%. That's impressive by any measure, but even more so since it followed an economic slump and bear market in equities which, when adjusted for inflation, had lasted 14 years. The U.S. stock market bottomed in the summer of 1982 and then rose continuously for two decades.
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