In the wide domain of finance, taxation is one of the issues to which public opinion is most sensitive. This paper explores why tax reform was hotly debated in Japan throughout the 1920s, focusing on the policies of the two main political parties. Though a topic rarely treated by historians, this controversy reveals a wealth of information on the concerns that lay behind policy choices in years that were marked by economic instability and social unrest; it shows, in particular, how the ruling elites tried to attenuate class conflict by enhancing the redistributive function of taxes, which had thus far been subordinated to the encouragement of rapid economic growth and the financing of state investment. While these attempts deserve attention as tentative steps towards the development of a welfare state, their limits indicate that the parties, in spite of extending the suffrage during this period, retained strong links with a restricted network of established constituents. This paper dwells especially on the earliest and least studied phase of the dispute on tax reform, in order to prove that the emergence of distinct party platforms did not stem simply from tactical considerations, but was rooted in broader policy visions.

This paper addresses the question of continuity in the long-term development of the Japanese tax system, focussing on fiscal reform in the 1930s in order to assess the impact of war on policy making. Specifically, it tracks the response of bureaucrats in the Finance Ministry to the challenge of how to reconcile economic growth with tax increases and redistribution of the burden. The views of ministerial officials are investigated on the basis of classified documents issued by the Tax Bureau, which previous research has only partially examined. The analysis points out that, rather than looking at war as an opportunity to push through a structural reform, bureaucrats continued to follow policy guidelines that were rooted in the developmentalist strategy established in the Meiji period. This conclusion helps to explain the resurgence of some key prewar features of taxation in the contemporary system, despite wartime reorganisation and attempts at further reform during the American occupation.

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