Published on July 5, 2024
Job titles and other details are as of the time of publication.
(The interview was conducted in Japanese and was thereafter translated into English.)

Pursing research on tax law from the perspective of monetary value

In the field of legal studies, two primary categories are recognized: public law and private law. There are various theories regarding the distinction between the two, but in general, public law is “laws that regulate the relationship between the state and public organizations and laws that regulate the relationship between the state and private individuals” (such as the constitution, administrative law, etc.), and private law is “laws that regulate the relationship between private individuals” (civil law, commercial law, etc.). My field of research is the former public law, especially tax law. Taxes are monetary payments imposed by the state on private individuals to raise the funds needed to provide public services.

Research in tax law allows for various approaches and perspectives. One such perspective is that of currency. For instance, we typically pay taxes in yen as if it were the natural order of things. However, under the current floating exchange rate system, where international transactions occur daily, the value of the yen, like other currencies, is not constant. This raises questions about what it means for governments to use their own currency as a standard of value to measure income for taxation purposes and whether this practice is appropriate. The government assumes that as long as the value of money remains stable, it is fair to collect the same amount of tax from any citizen with the same level of productivity, regardless of regional differences. However, citizens themselves often view after-tax income as the cornerstone of their livelihoods. From this perspective, it may be reasonable for tax amounts to vary by region. Exploring possibilities to bridge this gap is also an integral part of my research.

In this way, tax law is a discipline that does not delve into the law by itself, but instead incorporates various perspectives to consider: “What is the desirable state of the economic society, including taxation?”

During graduate school, I aimed to become a lawyer in the field of finance due to my interest in economics

When I entered the faculty of law, I did not have a clear motivation as to what I wanted to study. The fact that many of my family members graduated from the faculty of law may have influenced my choice of faculty. However, law is a discipline where knowledge is built up, and as I continued to study it, I gradually began to find it interesting. So I decided to pursue a career specializing in law, and I went on to law school. At that time, I had no intention of pursuing a career as a researcher. Rather, I envisioned becoming a lawyer. I was particularly interested in finance, and I remember that my immediate goal was to become a lawyer in that field.

There are two reasons why I was interested in finance. First of all, I have loved economics since I was an undergraduate. While studying at the faculty of law, I naturally became interested in finance because of the relationship between law and economics. Second, although the law has the image of mediating relationships between people, I felt more comfortable approaching the law from the simple perspective of money. For these reasons, when I first entered law school, I aimed to become a lawyer in the field of finance.

However, after participating in tax law classes and seminars, I discovered the fascination of research. As I worked on writing a research paper, I began to appreciate the process and found it enjoyable. This led me to consider that becoming a researcher might also be a good career path.

Tax law started after the war and has a lot of room for exploration and development

Most of all, I was attracted to the freedom of tax law. Due to time constraints, law classes tend to focus on interpretation. It goes without saying that interpretation is important, but tax law can be studied from a variety of approaches based on one’s own interests. In particular, in the classes and seminars I attended, tax laws were discussed freely and treated from a multifaceted approach, using methods from economics and history. For example, we analyzed from an economics perspective that when tax laws change, people's behavior changes. It was a big discovery for me that there is a field that not only deals with disputes between people, but also deals with taxation as a policy. I feel that tax law, backed by this high degree of freedom, is a large vessel that can absorb all kinds of related disciplines.

The high degree of freedom of tax laws may be related to the fact that they have a short history compared to the constitution or civil law. As far as I know, tax law started as an independent discipline after World War II. A key moment in this development was the second Shoup Recommendation of 1950. Following the first Shoup Recommendation in 1949, which outlined reforms for Japan’s tax system, the second recommendation raised the issue of the lack of tax law classes at Japanese universities. Therefore, tax law, which was once part of administrative law, became an independent research subject, and classes on tax law were established at the University of Tokyo and Kyoto University, and later spread to other universities. For these reasons, tax law has a short history compared to other legal disciplines, but it also has a lot of room for exploration and development, which is why it is possible to approach and discuss it freely.

Why I changed my career choice from lawyer to researcher

Even so, I was unsure about choosing a career after graduating from law school. Although I fully understood the fun of studying tax law, I could not give up on becoming a lawyer. In fact, many of my friends around me were studying for the bar exam. The reality is that lawyers are well paid. Moreover, there were still very few tax lawyers who were knowledgeable about tax law, so I predicted that there would be a lot of room for me to enter the field as a lawyer. However, I ultimately chose to become a researcher for two reasons.

First, rather than addressing the specific needs of individual clients, I could take a step back and consider the ideal structure of the tax system, focusing my efforts on research aimed at designing better policies. The second reason was that researchers have more freedom in using their time and are likely to be able to do cutting-edge research as much as they want. Additionally, I thought that there was a chance to become a lawyer even after deepening my studies. I was fortunate enough to start my career as a research associate right after graduating from law school and have continued researching tax law ever since.

The environment of Hitotsubashi University is attractive for someone in a cross-disciplinary field of study

I said that tax law is a large vessel that can absorb all kinds of related disciplines, but this means that we must keep our antennas up in all fields and continue to update ourselves. When commercial transactions occur domestically or internationally, tax laws are always involved. Transactions themselves are subject to private law such as commercial law and civil law, but as corporate transactions become more global, the economic environment changes, so tax laws must also change. This is clear from the tax reforms that occur every year. In addition, the currency used for tax payments has changed significantly in recent years to include crypto assets, for example, so we must continue to spread our antennas vertically as well as horizontally.

As someone who works in tax law, which requires cross-disciplinary efforts, the environment of Hitotsubashi University is attractive, as there are few barriers between faculties. We also have professors who study taxation from an economics perspective, so we can think about the state of taxes from a variety of angles. Being involved in both the Faculty of Law/Graduate School of Law and the School of International and Public Policy is also a great advantage for me.

Laws are not static things but things that can change at any time

I want students to study tax law from the perspective of how law relates to economic society, what role it plays within economic society, and how it affects corporate management and individual household finances. However, laws in general, not just tax laws, are not static and can change significantly. It is essential to not only look at the relationship, role, and impact on the economic society, but also to consider whether this is truly a desirable state and whether changing the law could move the economic society in a better direction.

Even if you don't pursue a career in research like I did, no one can be immune from tax laws in the sense that they pay taxes and receive public services. There is no greater joy for me than to have students learn about tax law in order to improve their social literacy, as it is something that will definitely be involved in their lives, and to realize how interesting it is.