Business: The Blue-Eye Blues

From Tokyo's Ministry of Justice last week came an ominous announcement: starting next January, Japanese police will investigate "all activities—both public and private—of foreign residents." The announcement meant that the Japanese government was putting teeth in the tough new tax rules laid down for foreigners by Finance Minister Hisato Ichimada, and was planning to use the police to get reports on everything from house rent to laundry bills. It was further harsh evidence of worsening relations between U.S. businessmen and the Japanese government.

Under Minister Ichimada's new rules, U.S. businessmen in Japan will pay up to 65% tax on all income, whether...

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