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Government Official Sees Japan’s Opinion Reflected in Bush’s Tax Statement With PM-Budget

June 27, 1990

Government Official Sees Japan’s Opinion Reflected in Bush’s Tax Statement With PM-Budget Talks, Bjt

TOKYO (AP) _ Japan has long been pressing Washington to raise taxes to cut the U.S. federal deficit, and a senior Tokyo official today said that may have helped get President Bush to agree to the idea of tax increases.

Misoji Sakamoto, chief Cabinet secretary, said Japanese officials strongly supported U.S. measures to cut the budget deficit in talks with U.S. negotiators in Tokyo this week.

The Tokyo talks are aimed at reducing Japan’s $49 billion trade surplus with the United States by making structural changes in both nations’ economies.

The talks went into an extra day today but remained at an impasse, said a senior Bush administration official participating in the negotiations. The official, who requested anonymity, urged Tokyo to match Bush by making a stronger commitment to ending the trade imbalance between the two countries.

Bush, in a written statement released Tuesday in Washington, did not say whether he was considering an actual tax increase or higher revenues from the current system.

But his willingness to include the word ″tax″ was the strongest indication to date that he might be willing to accept tax increases as part of an effort to lower the deficit.

An official from the prime minister’s office quoted Sakamoto as saying Bush ″may have paid consideration″ to Japanese opinion on increasing U.S. taxes.

The U.S. budget deficit is regarded as a spur to U.S. consumption that increases demand for Japanese imports and thus contributes to the trade imbalance.

On Tuesday, Japanese officials at the talks asked U.S. negotiators why the United States dropped a target year of 1993 for eliminating the deficit, estimated at $200 billion in the fiscal year that begins Oct. 1.

U.S. officials, who spoke on condition of anonymity, said later Tuesday they told the Japanese that Washington wants to look beyond eliminating the budget deficit by 1993 and to envision a budget surplus.

In addition to working on lowering the budget deficit, the United States has agreed to improve worker training and education and to increase savings, steps designed to increase exports and lower imports.

Among other issues, Japan has agreed to increase public works spending, ease restrictions on opening large retail stores, revise land-use policies to curb high land prices and crack down on unfair business practices.

The measures are thought likely to increase foreign opportunities for trade and investment in Japan.

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