Knowledge for the Future

Guided by the slogan “Knowledge in Action, Shaping the Future,” the Tokyo Foundation aspires to become a truly world‑class independent think tank engaged in policy research and leadership development. Reactions to the recent release of policy proposals have strongly affirmed the direction we intend to pursue, offering not only corroboration of their relevance but also insights into how to build momentum for implementation. Below is a brief overview of these developments and reflections on what they imply for the Foundation’s future efforts.

Policy Proposal on a Refundable Tax Credit System for Japan

On April 10, 2026, the Foundation released a policy proposal on “Designing the Refundable Tax Credit System for Japan,” presenting a concrete roadmap for implementation. Drawing on the experience of other countries—notably the United States, where refundable tax credits combine tax relief with cash benefits to support low‑income workers—the proposal highlights how such systems have successfully strengthened work incentives while reducing inequality.

Japan, however, faces a longstanding structural gap. Workers with low to moderate incomes—such as nonregular employees in the so‑called Employment Ice Age cohort—often fall between existing safety nets: employment insurance functions as the “first” safety net, while public assistance as the “third,” but there is an absence of a robust “second” safety net for struggling working households.

To address this challenge, the proposal—authored by Senior Policy Research Officer Shigeki Morinobu and Nonresident Senior Fellows Motohiro Sato, Takero Doi, and Kazumasa Oguro—sets out a two‑stage institutional design for introducing a refundable tax credit tailored to Japan’s labor market and tax system. The aim is to reconcile two seemingly competing goals: supporting employment while ensuring effective income redistribution.

Following its release, major national media outlets—including the Asahi Shimbun—widely covered the proposal. The attention reflected a growing recognition that, despite longstanding awareness of the vulnerabilities facing lower‑income workers, Japan has yet to adopt decisive measures to address the issue. The Foundation’s proposal offers a concrete and credible path forward in this policy debate.

Advancing a Resource Strategy through the Circular Economy

On March 31, 2026, the Foundation formally presented “A Policy Proposal for Proactive Utilization of a ¥13 Trillion Treasure Trove” to Minister of Economy, Trade, and Industry Ryosei Akazawa. Authored by Senior Fellow Hikaru Hiranuma, the document addresses mounting mineral resource risks, including supply instability of rare earths and the continued outflow of national wealth due to Japan’s heavy reliance on imports.

To counter these risks and lay the foundation for a stronger economy, the proposal calls for a domestic resource strategy centered on the circular economy. At its core, the strategy reframes accumulated domestic mineral waste—often referred to as urban mines—as a valuable, homegrown stock of strategic resources. By leveraging these materials, Japan can reduce import dependence, retain economic value domestically, and strengthen industrial resilience.

Recognizing that resource dependency extends beyond minerals to include fossil fuels, a companion proposal for a comprehensive resource and energy strategy was also submitted to the METI minister. This broader vision calls for a distinctly Japanese model of the circular economy, one that physically and economically recirculates \38 trillion worth of an array of domestic resources to build an integrated circular society.

Encouragingly, on April 21, shortly after these submissions, the government adopted a Circular Economy Action Plan at the fourth meeting of the Ministerial Council on the Circular Economy. The plan commits approximately ¥1 trillion in combined public‑private investment by 2030 for technology development and infrastructure.

Notably, the action plan incorporates many elements central to the Foundation’s proposals, including: (1) establishing resource recovery and recycling hubs, (2) using waste and underutilized domestic resources to support local decarbonization efforts, and (3) positioning the circular economy as a nationwide movement, rather than a niche industrial policy.

Prying Open a “Policy Window”

The two proposals outlined above exemplify the Foundation’s approach. In public policy theory, one influential framework is the “policy window” model, developed by John W. Kingdon in his 1984 Agendas, Alternatives, and Public Policies. In brief, a policy is most likely to be adopted when three “streams” align: a clearly recognized social problem, a viable policy solution, and a political environment willing to accept change. When these multiple streams converge, a policy window opens.

The Tokyo Foundation has long engaged in rigorous policy research and produced numerous policy proposals. For policy change to occur, however, research alone is not enough; policy entrepreneurs—politicians, civil servants, and other decision‑makers—must understand, champion, and act on these ideas.

With this perspective in mind, the Foundation will go beyond publishing recommendations, building on initiatives like those described above to deliver policy ideas directly to policy entrepreneurs, explore new channels of engagement, and pursue every opportunity to pry open policy windows.