Prime Minister Naoto Kan wants to be less obvious with a 5 percentage point cut from next fiscal year.

So you are a global employer and asking where it was installed. How to choose a place where corporate taxes are 17 percent or nearly 36 percent?
It does not take a Harvard MBA to know that Hong Kong (16.5 percent) and Singapore (17 percent) make better business sense in Japan (40.7 percent). Now, Prime Minister Naoto Kan wants to be less obvious with a 5 percentage point cut from next fiscal year.
It is the passage of the unusual policy indicates both a step in the right direction and shows why Japan is becoming an also-ran. A rate of 35.7 percent of Japanese tax still do not stack up well against 28 percent in the United Kingdom and 25 percent in China.
Deflation in Japan has been slipping out of the screens of investors radar for years. However, I am struck by how the dynamics are accelerated in 2010. Travel to London, New York or Singapore these days and rarely the third largest economy appears.
Here are five ways Japan can stop the fall in 2011.
A: Taxes. Raising them would be economic suicide in today's global environment, yet often dominates discourse in Tokyo. Both energy will discuss the possibility of raising consumption taxes to pay the huge debt of Japan. Soon going to question how things worse.
Tax cuts
Japan needs to increase the wealth and get consumers to spend more. Increasing taxes on the consumption of households already have a tax is economic suicide. It did not work in the 1990's and it will not work now.
Lower taxes are the way forward, and Kan falls short. It is an incision, not a serious tax cut. supply-side economics is a discredited dogma. However, Japan has to enable SMEs to create a new energy economy and employment. Tax cuts can be paid to stop unnecessary projects and public works.
Two: Really on trade. South Korea is breaking out on his hard-won agreement on free trade with U.S. Why can not Japan do the same? agricultural-industrial complex in the nation would be a place to start. Farmers are lavished with generous government subsidies and political clout they deserve modest gross domestic product orders.
Nor is the strength of the yen the problem - which is to protect Japan's domestic inefficiencies. Kan's Democratic Party of Japan has to think about the other 126 million of the country, special interest groups not only close. In the era of China, has no choice. Japan can continue to fight an unwinnable war against globalization, or to welcome the benefits that come with freer trade.
English please
Three: speak English. It is no coincidence that two of the most innovative companies in Japan, the clothing chain Fast Retailing Co. and Internet shopping mall Rakuten Inc., are driving the world business language in employees. As the population declines and a strong yen wave power of buying companies for acquisitions abroad, improve international communication is crucial.
That is woo the best quality talent. Ask any consultant economist at hedge funds or why not are flocking to Tokyo and the language is almost certain to arise. For an economy that has reached its peak, becoming a more hospitable place for MBA from Harvard and the talent of others is vital. The best way to take advantage of a changing world is to speak their language.
Ageing Population
Four-touch the aging population. In recent trips to China I was surprised by all of 60 Japanese encounter something there, all paid work. While it is difficult to quantify, in a recent Asahi Shimbun article tells the story of the IAT (China) Co. Auto Technology, a company car design and development.
About 40 engineers working for Japanese names such as Isuzu Motors Ltd. and Mitsubishi Motors Corp. are playing a central role in the development of China's assault on automakers, Asahi reported. Japan must do more to benefit from what Nicholas Smith, director of research at MF Global Securities in Tokyo, called "the perfect demographic."
Japan has a surplus of retirees and women qualified to drive economic growth. It is not doing enough to make good use of force. A nation with a birthrate and an aging workforce has to do with what you have.
Five: get hip to immigration. An obvious way to capitalize on the growth of Asia is relaxing immigration rules. Foreigners made up just 1.7 percent of the population of Japan in 2009. That compares with 25 percent in Australia and 14 percent in the U.S. from 2008 on the basis of the Organization for Economic Cooperation and Development statistics.
The U.S., for all its problems, is much more business in Japan and has increased productivity. Australia is one of the few major economies around to guide the global crisis. In both cases, diverse workforce, vibrant and resilient economies and fulfilled.
Khan wants to double the number of skilled foreign workers by 2020. Japan has to go beyond the general appeal of Harvard University. It is necessary to welcome many low-income workers, too. Like the income tax plan, this shows that Japan is evolving. The problem is that is doing the same glaciers to make a big difference.
It's time to pick up the pace of change, and 2011 is the year to do so.