Laurel outlook., 1946-01-02
To Tax Away All
Jap War Profits
Macarthur Orders 100 Per
Cent Levy; Directive
Strongly Worded.

TOKYO. - In a stern "war does
not pay" directive General Mac.
Arthur has ordered the japanese
government to tax away the wal
profits of all Nipponese firms and
individuals and make a capital levy
ranging up to 70 per cent on corpor-
ate and private fortunes - includ-
ing the imperial households.
Accompanying the directive was a
statement that said it would Gre
suit in a more equitable distribu-
ton of wealth than Japan has ever
had"
In the most strongly worded order
of the occupation to date, the SUI
preme commander prohibited all
government credit or subsidy activ-
tiles pending sweeping reorganiza-
ton of government finances, and
directed the Japanese to submit a
complete war profits tax program to
the first session of the Diet in 1916.
Reaching down to the very SOL
diers and sailors who fought the war
as well as the generals and admirals
who directed it and the Zaibatsu
(big family concerns) who supplied
it, General Macarthur also ordered
the government to terminate by
February l the payment of any dis
charge allowances or service pen
sions to japanese veterans Except
compensation for physical disability
limiting the recipients ability to
work"
Funds are Blocked.
General Macarthur told the Nip
ponese, certain Japanese interests
have used unjustified and aggres-
sive wal to illegally enrich them
selves for many years. You will
demonstrate to all japanese that
war is financially Improbable by
insuring that the tax includes the
period not only dating from the per-
idious attack on Pearl Harbor but
includes the period to that date to
maximum extent possible"
The directive blocked government
funds intended for payment of war
ndemnities to Japanese firms and
Individuals, on which the govern
nent still owes approximately SO
yen. 1t gave the government
80 days to recover all such war in
iemnity payments, in excess of
1000 yen, which have been made
since August Is.
The purpose of this freezing is to
assure that funds are kept available
or taxing purposes under the new
.var-profits tax. At the same time,
he supreme commander said, eff
orts would be made to permit the
Japanese farmer, laborer and small
business man to retain their legiti-
savings.
Generally the tax program con-
emplates a 100 per cent war profits
ak on all wal industries and a grad
lated tax up to 100 per cent on all
Their corporations and individuals,
supplemented by a graduated cap
levy up to at least 70 per cent. !
No Exemptions. .
The imperial household is in
luded, since the directive specifies I
hat there must be no exemptions. J
The recapture of war profits and
ne capital levy are expected to
ield well over 100 billion yen, thus S
roviding "the financial basis for
ne reorganization of government ,
nances toward peaceful ends"
General Macarthur described the
irective's termination of all service
ensions as another major step to-
ard tightening the deadweight bur- 6
en- which Japanese militarism c
'rced the rest of the country to =
ear" +
Supreme headquarters estimated +
the abolition of military pen r
.ons would remove a yearly burden =
is billion yen. =
The ministry of finance informed =
lpreme allied headquarters that :
lie government had assumed war *
demnity insurance liabilities total =
g 56.5 billion yen, of which sos '
llion remains unpaid. Of this total. .
ar industries have claims for 1875 !:
llion yen, plus 1876 billion yen for ~
ar risk insurance and Al billion =
r cancellation of war contracts. V