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Incorporating !e Japan Advertiser 1890-1940!e Japan Chronicle 1868-1940

!e Japan Mail 1870-1918!e Japan Times 1865-1870

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!e Japan Times, Ltd.

Chairwoman and Publisher YUKIKO OGASAWARA

President TAKEHARU TSUTSUMI

Director MASARU ONODERA

Managing Editor SAYURI DAIMON

Chief Editorial Writer TAKASHI KITAZUME

8 THE JAPAN TIMES MONDAY, FEBRUARY 6, 2017

opinion

EDITORIAL

Adoption as a means of reducing inheritance taxation is said to be common among wealthy people. In over-turning a lower court decision that invalidated a late Fukushima Prefecture man’s adoption of his grand-

son in 2012 on the grounds that the step was a tax-saving mea-sure, the Supreme Court has ruled that the intention to reduce the amount of taxes will not automatically annul the adoption itself. !e top court decision may be taken as a sign that the judiciary condones adoption as a tool of reducing inheritance tax. But the National Tax Agency holds that such an adoption, even if it’s con"rmed valid, may still not qualify for deduction from taxable assets.

It would be natural for people to want to leave behind as much assets as possible to their family members. Under the inheritance tax system, the basic deduction from the taxable assets rises as the number of heirs increases. It is reportedly not uncommon for the wealthy to adopt their grandchildren or spouses of their children to reduce the tax imposed on the assets inherited by the heirs.

But such tax-saving measures over inheritance could sow the seeds of trouble among the heirs, since some members of the family might sense that they had been unfairly treated compared to others. !e case at issue was taken to the court by the man’s daughters, who argued that the deceased’s adop-tion of the son of their brother, which e#ectively allowed the brother’s family to inherit more of the father’s assets than each of the daughters, was invalid because it had been intended as a tax-saving measure. Such discord may not be resolved by a court decision. To avoid that, it is advisable that these matters be thoroughly discussed in advance among family members.

!e Fukushima man, who died in 2013 at the age of 82, adopted his son’s young child the year before his death. !e man, who had earlier lost his wife, had four legal heirs — his son and two daughters plus the adopted son. !e heirs’ total inheritance tax payment was reduced through the adoption — since the deduction from taxable assets is calculated by multiplying ¥6 million by the number of legal heirs and add-

ing ¥30 million (¥10 million multiplied by the number of heirs plus ¥50 million before the system was amended in 2015). But the adoption resulted in the son’s family e#ectively inheriting half the father’s assets, reducing the portion for each of the daughters.

!e daughters and their brother contested the validity of the adoption. !e Civil Code says an adoption is invalid when the parties concerned have no intention to form a parent-child relationship. !e daughters argued that the adoption was invalid because the father, who had been advised by his tax accountant, adopted his son’s son as a tax-saving measure. !e Tokyo Family Court upheld the adoption as valid, but the Tokyo High Court reversed the decision and called the adop-tion invalid because it was nothing but a tax-saving measure by the father, who had no intention of forming a true parental relationship with the son’s child.

In overriding the high court decision, the Supreme Court ruled last Tuesday that an adoption will not be invalidated even if it is primarily meant as a tax-saving measure. Noting that the motivation to reduce taxes and the intention to adopt can coexist, the top court said it saw no circumstances indi-cating that the father had no such intention.

Adoption has indeed long been used as a measure to cut inheritance taxes. Some wealthy people in the past are said to have had large numbers of adopted children for this purpose — as many as 10 in one reported case. Such a practice led to the 1988 revision to the tax system that limited the number of adopted child who can qualify as legal heir to one (or two when the person in question has no children of his or her own). !e inheritance tax law stipulates that an adopted child will not be counted among the heirs if the adoption results in unfairly reducing the tax burden. !e tax agency says deduc-tion may be denied for an adopted child even if the adoption itself is valid, depending on the circumstances behind the process and real-life situation of the parties concerned.

!e Supreme Court decision may have e#ectively condoned the status quo. But it should lead people to think about the practice of adoption as a tax-reduction measure.

Tax-avoidance adoptions

THE GLOBAL PERSPECTIVES

THE AUSTRALIAN FINANCIAL REVIEWSydney

!e irony of Donald Trump’s extraordi-nary phone call with Malcolm Turnbull is that the Australian prime minister is defending a version of the strong, even harsh, border control policies that the U.S. president promises to implement. Even amid Trump’s jarring histrionics, Turnbull appears to have stood his ground on the deal he struck with Barack Obama to take hundreds of refu-gees from countries which Trump now has virtually closed the door on.

!at allows Turnbull to remove those detainees on Nauru and Manus Island who have been refused entry into Aus-tralia as part of the Coalition’s tough

border control regime to stop boatpeo-ple arriving on our shores — a version, perhaps, of Trump’s wall along Ameri-ca’s border with Mexico.

Yet, even if Trump’s tweet that he intends to keep studying this “dumb deal” is simply aimed at his domestic political base, or is some sort of negoti-ating tactic, the personal bust-up under-lines the volatility of the new leadership of Australia’s chief security partner. !e Australian Financial Review cautioned here on Friday against using up so much diplomatic capital with an unpredict-able new president on a refugee deal that’s all about our domestic politics. !e risk was of a big win or a serious rebu# — even now, we can’t be sure.

!e critical point is that a very awk-

ward refugee deal is happening while we need the clearest channels with Washington. We have to navigate the rapid and historic shifts in America’s view on trade, China, and the regional balance of power — very big things that will a#ect us for decades. Even the domestic heartburn on refugees is hardly worth the potential costs here.

Turnbull has handled the latest fallout as well as could be expected, expressing disappointment over the leaking in Washington of his conversation with the new U.S. president. As the leaders of Japan and Germany also have found out this week, being a close ally does not provide protection against being Trumped.

Kyodo (Feb 3)

With Donald Trump, it gets personal

Philip BowringHong Kong

Bully and coward are the same person. Donald Trump, in o$ce for only a brief time, is already proving that one point that ought to make even Trump voters uncomfortable. !eir leading man mim-ics an upstart Asian leader, the new Phil-ippine President Rodrigo Duterte, who assumed his o$ce last summer.

Trump shares Duterte’s loud mouth, delight in insults and post-truth utter-ances. And Duterte, just like Trump now, presented himself as the quintes-sential hard driving, no-nonsense tough guy, wielding power in the interests of the downtrodden and disadvantaged — in his case not against “Washington,” but against Manila elites, criminals and corruption. He regularly intones that he would defend the integrity of the nation against external and internal threats.

In another amazing parallel between the United States and the Philippines, the main external threat of the Philip-pines is quite clearly China.

After all, China had seized the Scar-borough shoal, rich "shing grounds o# the Philippines coast. Worse, it has been militarizing its claims over almost the whole of the South China Sea.

Given what a tough guy Duterte makes himself out to be, the expectation was that, once elected, he would surely take advantage of the July 2016 Court of Arbitration ruling in the Philippines favor and redouble its e#orts to face the Chinese Goliath. Instead, he %ipped in the opposite direction. He turned on the U.S. ally and pronounced that there is no point in confronting China. !e Phil-ippines cannot possibly win against such a giant, Duterte argued.

What is politically far more important for Duterte is that the U.S. makes a far better foreign target by which to express the president’s claims to nationalism.

Meanwhile, Duterte is clear that the real enemy is within — drug users and vendors. Duterte’s so-called war on them has so far claimed 6,000, and counting, lives of his own people. Many innocents have died — but none on the side of the so-called forces of law and order, o$cial or uno$cial killers.

And, of course, while thousands of civilians die in Duterte’s one-sided local war, not one soldier or sailor has been put in harm’s way to stand up to China.

Instead, the loud-mouthed president has been eagerly stretching out his hand to receive the proper payo# for his being nice to China. Ever the wheeler-dealer, purely transactional, without principle, Duterte is aggressively looking for cash for projects. Upon arrival from China, these funds will doubtless bene"t many of his own o$cials long before they serve the public.

Contrast this Filipino connivance with (still communist) Vietnam’s princi-pled willingness to "ght, i.e., make China pay a cost for its sea-borne aggression.

While that is an unspoken matter of shame for Duterte, the pattern under his tutelage remains the same — only that his country now seeks to please China, no longer the U.S.

Likewise, Trump arrived in o$ce waving his nationalist club. Yes, the trade de"cit is a problem and clearly by far the biggest part of that problem is China — at least judging by the raw mer-chandise trade data China is also the one country least given to reciprocity of investment and service sector access.

Internationally, it was rather obvious that any future reduction in U.S. global in%uence, to the extent it isn’t home-made, does not come primarily from Russia, let alone the European Union, Iran, India or Mexico.

!e new power challenging the U.S. is China, and nowhere more so than in East Asia. In “Making America Great Again,” China should be "rst on the list of international concerns for Trump. And yet, no sooner than Trump arrived

in o$ce did he start beating up on America’s friends, not China. First in line: Canada and Mexico. NAFTA, in many ways an exemplary trade deal, must be re-negotiated. And meanwhile, let’s insult the Mexicans with a wall. !e U.S. under Trump stands out by build-ing its version of the Soviets’ Berlin wall, and Israel’s West Bank wall. Trump, the chump, gives priority to taking on a smaller neighbor, Mexico.

Next on the list of friends to be right-fully frightened are the Europeans. !e specter of an arbitrary new tari# wall threatens to undo 60 years of U.S.-led progress toward the freer trade which has helped unite Europe as well as been a driver of American global in%uence.

Just to add insult to threats to Europe, Trump for good measure casts doubts on NATO. Only the Brits, with Prime Minister !eresa May and Foreign Sec-retary Boris Johnson desperate for some way out of their Brexit cul de sac, are likely to be taken in by Trump’s unilater-alist trade notions.

For the U.S.’ partners in the Asia-Paci"c, Trump’s ditching of the Trans-Paci"c Partnership was another insult. !e project had many %aws and may have stalled anyway, but its brutal killing sent a message of contempt to such diverse actors as Japan, Malaysia, Viet-nam and Australia.

!e Chinese have scarcely been able to contain their glee. U.S. friends around the region note that China will "ll any vacuum Washington leaves.

Meanwhile, any faith in America as a reliable ally is undermined. Among the democratic leaders of the region, one even hears the words: Maybe Duterte was right.

!at’s not to suggest that Trump will not soon "re some heavy guns at China. He has upset Beijing enough already with his phone call from Taiwan’s Presi-dent Tsai Ing-wen and the warlike threat from U.S. Secretary of State Rex Tillerson to block Chinese access to their islands in the South China sea. !at is probably

hot air. What matters more in the short term at least is what Trump does on trade regarding China. !e Chinese are pragmatic enough to know some U.S. complaints are reasonable.

And they know, given their own stut-tering economy, that a major trade war with the U.S., its best customer yet, would do heavy damage to China.

But in a way, Trump has already missed the moment. Any tough-minded trade policy aimed at China alone might have borne fruit — without doing dam-age elsewhere.

However, having already annoyed most of the rest of Asia (as well as Europe) with general protectionist threats, the TPP exit, and the Japanese in particular (with his focus on the auto industry), Trump’s ability to single out the Chinese for harsh treatment is lim-ited.

Japan may hope it can do a deal to limit damage to itself, but it, like the other players in East Asia, notably South Korea and Taiwan, are so locked into cross-border manufacturing systems that a cascade of trade contractions hurting friends and foes alike is an alarming possibility.

No increase in U.S. global power can be achieved without friends. !at includes the access that the U.S. military has at key points, including Singapore and Subic Bay in the Philippines. Plans for a much bigger navy, for example, make no sense in the absence of alli-ances forti"ed by commerce as well as hardware.

!ose familiar with Trump the busi-nessman may not be surprised by any of this. In Scotland, he cared not about o#ending millions of Scots with his methods to get his way when building a golf resort.

Currently, his group is cooperating with a similarly ruthless Indonesian Chinese developer to build a Trump Tower hotel to overlook a sacred pil-grimage site in Bali.

Bullying may work in some business ventures, but the self-styled master of the deal cannot comprehend that inter-national politics is more akin to Go than to Liar Dice.

!us far, Trump internationally has angered many and pleased only the fol-lowing: China, Duterte, Russia President Vladimir Putin, the Israeli expansionists, the European extreme left and racist right, the Iranian hardliners and Kim Jong Un.

Well done, America.

Philip Bowring is a Hong Kong-based journalist. He formerly served as the editor of the Far Eastern Economic Review and a columnist for the International Herald Tribune. © 2017, The Globalist

Trump’s international role model? Rodrigo Duterte

London

“Without a proper sense of urgency, we will be eventually defeated, dominated and very likely destroyed,” wrote former Gen. Michael Flynn, U.S. President Don-ald Trump’s national security adviser, last year. “!ey are dead set on taking us over and drinking our blood.”

It’s so early in the new year that nomi-nations for Year’s Most Ridiculous State-ment are not even o$cially open yet, but this has to be a strong contender. Flynn was talking, believe it or not, about the “Islamic terrorist threat.”

He was predicting that the United States, despite having the world’s big-gest economy, 325 million people, the world’s most advanced technology, and more than 4,000 nuclear weapons, faces defeat, domination and probably destruction at the hands of 10,000 to 20,000 Islamist terrorists — unless, pre-sumably, it gets serious and starts tor-turing people again.

Even if all of the world’s 1.6 billion Muslims were politically and militarily united — an event less likely than their mass conversion to the Jedi faith — and they were all committed to a cold or even a hot war against America, the United States would survive. !is is not just doomsday talk. It is extremely stu-pid doomsday talk. But there is a lot of it around at the moment.

Take, for example, the famous Doomsday Clock, a metaphorical device concocted by the Bulletin of Atomic Sci-entists in 1947 to signal how close we are to the end of the world. Midnight was the apocalypse, all-out nuclear war. Last month the bulletin moved the min-

ute hand of the clock to two-and-a-half minutes to midnight, the closest it has been since the depths of the “Second Cold War” in 1984.

I was already a journalist in 1984, and I had already interviewed the com-manders and the operators of the nuclear forces on both sides of the Iron Curtain. And I was 10 times more fright-ened then than I am now.

What’s going on here is simply in%a-tion. Terrorism is strategically a mere nuisance, and in terms of your personal threat level it is statistically irrelevant. An American, for example, is 10 times likelier to drown in the bath than to die in a terrorist attack. Yet terrorism gets as much media attention today as the threat of a global nuclear war got back in the Cold War. To paraphrase Parkinson’s Law, threats expand to "ll the (media) space available.

!e scientists who calibrate the Doomsday Clock are serious and sin-cere people, but they are not immune to the in%ationary trend. !e clock was set at seven minutes to midnight during the Cuban Missile Crisis of 1962 (which came close to triggering global nuclear war and killing hundreds of millions of people). Now, they say, it’s only two-and-a-half minutes to midnight. Really? Are you sure?

Nonsense. !e world is a bit more dangerous than it was just after the end of the Cold War in 1991, when the clock was set back to seventeen minutes to midnight, but no year in the past 25 has been as dangerous as any of the years before 1991. Nuclear war between great powers is still the real Big Deal.

However, the people who run the clock have greatly expanded the range of threats they worry about since the risk of a nuclear war declined. !ey include cli-mate change now, and the resurgence of old-fashioned nationalism from Amer-ica and Britain to India and Japan, and

pretty well everything else down to acne and hangnail. !ere is no fate worse than being ignored.

!at’s how we got to this point, alleg-edly two-and-a-half minutes to mid-night. From 17 minutes after the end of the Cold War, they pushed the minute hand forward every time anything wor-risome happened — and only once pushed it back, by one minute, for only two years.

It went forward three minutes in 1995 because there were still 40,000 nuclear weapons in the world. It jumped for-ward another "ve minutes in 1998 because Indian and Pakistan had tested nuclear weapons (although the total number of weapons in the world had halved). And another two minutes in 2002 because the Bush administration in the United States withdrew from the Anti-Ballistic Missile Treaty.

Another two minutes forward in 2007 because North Korea tested a nuclear weapon and Iran was rumored to be working on one (it wasn’t). !en a two-minute jump forward in 2015 because of “unchecked climate change, global nuclear weapons modernizations, and outsized nuclear weapons arsenals.”

So when Trump came to power two weeks ago, frightening people with his reckless talk and impulsive actions, the clock was already at three minutes to midnight, and they could only push it forward by another 30 seconds.

!at’s about right in terms of the extra threat Trump represents. It’s completely wrong in terms of where the global threat level is now. Trump is a loose cannon, but he’s not the Apocalypse, and most other world leaders are still grown-ups. Let’s say 10 minutes to mid-night.

Gwynne Dyer is a Canadian independent journalist and military historian.

Trump presidency triggers doomsday in%ation

China should be !rst on the list of international concerns for Trump. And yet, no sooner than Trump arrived in o"ce did he start beating up on America’s friends.

GWYNNE DYER

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