Japan’s reconstruction needs civil servant pay cuts, not tax hikes. Redirect savings and bonds into top companies, build a sovereign wealth fund, and turn corporate dividends into national revival.

This text argues against raising taxes for disaster reconstruction and proposes cutting civil servant salaries instead, highlighting that these salaries constitute a significant portion of Japan’s tax revenue. It critiques the system where private sector workers face high risk and low returns while civil servants enjoy high salaries and stability. The author also suggests a bold strategy to leverage Japan’s vast private wealth by issuing government bonds to purchase shares in leading companies and establishing a sovereign wealth fund to strengthen the nation’s economic power and build a true capitalist society.

Stop the Lies and Foolishness About Reconstruction Funding
May 25, 2011

This year’s tax revenue amounts to 41 trillion yen, while the amount paid out in public servants’ salaries is 27 trillion yen. After Professor Kishi of Keio University Graduate School revealed this on a TV program, I was left deeply shocked, as I have written before.

I knew that Asahi Shimbun would hardly adopt an article by an unknown writer like me, yet I submitted this manuscript as per the rules. For those who have already read the part I posted earlier on civil servants, please continue here from “What Japan Must Do.”

Who are civil servants? They are politicians—members of the Diet, scholars and staff at national universities, bureaucrats in Kasumigaseki, national civil servants, governors, mayors, local assembly members, and municipal civil servants. Today, in terms of average salary and absolute security of employment, they are the highest-paid class in Japan.

Meanwhile, private-sector workers live in constant uncertainty. Yet with unparalleled diligence, attention to detail, and a spirit of beauty rarely found elsewhere in the world, they have labored like ants. Japan became a splendid butterfly, but in fact, most of those who became butterflies were civil servants. The fact that, out of tax revenue of 41 trillion yen, 27 trillion yen is spent on their salaries makes this clear.

We hear repeatedly: “There are no funds for reconstruction; only a tax increase can secure them.” This is beyond absurd—it is deception and idiocy. The funds are right there, politicians and scholars now joining the chorus for higher taxes, and civil servants of every kind.

Taxes are not generated by your labor. They come from private-sector workers—living in high-risk, low-return conditions, or in light of the great disaster, high-risk, no-return. Even true elites who chose to remain in the private sector spend their lives in relentless competition with rival firms and foreign competitors, dying without enjoying life.

Civil servants’ pensions are guaranteed even after death, while most private workers’ pensions are precarious. Private workers can instantly lose their jobs in a disaster like this one, but civil servants never do—even in a once-in-several-hundred-years or once-in-a-thousand-years catastrophe.

Is it not obvious? Do I even need to say it further?

Politicians and professors of Tokyo and Osaka Universities now insist: “There is no choice but to raise taxes.” But this is an unprecedented national crisis—the nation’s body is half destroyed. On top of that, the nuclear plants you created turned Fukushima into “Fukushima,” adding to the damage, expanding reputational harm at home and abroad, and pushing private workers’ wages further down.

Who has supported you until now? Who has guaranteed that even in retirement you enjoy a “life of leisure and letters,” something only a few in the private sector can afford?

If, as pointed out by readers of my blog, the average civil servant’s salary is 7.5 million yen, then the number of civil servants is around 3.6 million. Just 3.6 million people, out of a population of 120 million, are receiving 27 trillion yen out of 41 trillion yen in tax revenue. Is this not a farce?

I speak on behalf of the 97% of the nation who are private-sector workers. I have generated more than 20 billion yen in taxes through my work, so I have the right to speak.

And now, at a time like this, you dare to say, “There is no choice but to raise taxes”? Politicians, Diet members, and professors at national universities—you should declare instead: “We will cut our own salaries by 30%.”

That alone would create 8.1 trillion yen. In two years, 16.2 trillion yen—enough for reconstruction funding. Why can you not say this? If you truly believe you are public servants, you would. If you cannot, then you are parasites, leeches draining the nation.

Would cutting your salaries harm consumption? Not at all. You are savers, not spenders. With little stress at work, you do not dissipate your earnings on drinking or leisure like private workers do.

The truth is, the greatest contributors to consumption are private-sector workers earning under 5 million yen a year—especially women—and the very wealthy. A law requiring the wealthy to spend at least 10 million yen annually on consumption could help. Spending over 50 million or 100 million yen could be treated as a donation and made tax-deductible. Those like Masayoshi Son or golfer Ryo Ishikawa who donate all their income to disaster relief should, of course, pay no tax on that portion.

The wealthy should simply consume: buying cars for disaster victims, new or used, or any goods to donate. Just spend.

At a press conference, the president of Daiwa Securities Group noted that of personal assets, 800 trillion yen sits as cash deposits, still increasing. I can assert that much of this increase is civil servants’ savings.

Thus, fears about reduced consumption are baseless.

Following is an excerpt from an email I sent to the OECD Tokyo office the day after their report suggested Japan needs a 20% consumption tax increase:

“Cut civil servants’ salaries by 20%.”

The OECD’s recommendation for Japan’s debt reduction included a note: Given the disaster, more than 3.6 million public servants, with an estimated average annual salary of 7.5 million yen—including Diet members, Kasumigaseki bureaucrats, governors, mayors, and local officials—should have their salaries cut by 30% for two years, raising 16.2 trillion yen for reconstruction.

As true public servants, this should be natural. The OECD also recommended reforming Japan’s civil service system to suit a capitalist society: when tax revenue falls, civil servants’ pay should also fall, just like in the private sector. Without this, Japan cannot survive as a 21st-century nation, standing alongside the U.S. and leading the world as a champion of freedom and democracy.

That 27 trillion yen of salaries should be paid out of 42 trillion yen in revenue, with an average salary of 7.5 million yen, is madness.

Japan is not Greece—it must lead the world economy. Civil servants, who make up only 3% of the population and live entirely off taxpayers, cannot secure their own safety and prosperity while the nation declines.

I also argued: Why not issue government bonds to purchase shares of Japan’s top companies? The average dividend of TSE-listed firms is over 2.2%. Prioritize high-dividend firms and invest.

On March 14–15, after the government failed to act, 54 trillion yen of market capitalization was lost in just two days. Issue 54 trillion yen in bonds and buy these companies’ shares. Dedicate the dividends entirely to reconstruction. Keep 44 trillion yen invested long-term, and actively manage 10 trillion yen to encourage competition among securities firms.

With such action, the Tokyo Stock Exchange would rival New York, becoming a world leader.

This is what Japan must do: mobilize its vast personal savings, strengthen its market, curb speculative abuses, and turn corporate strength directly into national wealth. Japan must establish a sovereign wealth fund now, just as China and Singapore have done.

Capitalism rewards those with the largest funds. Japan, already a nation with nearly 1,500 trillion yen in household assets, can and must act.

This is what I believe Japan, the nation where the “turntable of civilization” turned more than 20 years ago, must urgently do today.