By Linda Sieg
NAGOYA, Japan (Reuters) - With his baseball cap and heavy local accent, the mayor of this city in Japan's industrial heartland is taking on the somber, dark-suited -- and increasingly unpopular -- politicians in Tokyo.
"I want to make it a battle of ideologies," said Takashi Kawamura, whose U.S. Tea Party-like pledge to cut taxes and slash legislators' salaries swept him to victory as mayor of Nagoya, a city of two million and capital of a prefecture that is home to Toyota Motor and other major Japanese manufacturers whose workers have been an important support base for the ruling Democratic Party of Japan (DPJ).
"I want to make Japanese politics a battle between Tax Cut Japan and Tax Hike Japan, between the socialist idea of raising taxes and the idea of cuttings taxes and small government," Kawamura told Reuters in an interview in his slightly shabby private office, where a poster proclaims "Japan Tax Cuts and Democracy Start from Nagoya."
It is a platform in sharp contrast the debate in national politics, where Prime Minister Naoto Kan's government is being blocked by opposition parties who have brought government to a near standstill and refuse even to discuss reforms he argues are vital to curb massive public debt.
Kan has suggested a sales tax increase is essential to help fund the mushrooming cost of one of the world's fastest aging populations. But he has failed to make any headway, after 10 months in office, in pushing aside an increasingly muscular opposition, even though many share his concerns over the bulging debt.
A combination of policy flipflops and perceived diplomatic missteps has pushed his government's popularity rating to just 20 percent.
That has given hope to opposition parties which are trying to unseat the government by blocking bills to implement the budget and forcing a snap election they are certain it would lose and make Kan, in power since June, the fifth premier since 2006 to stumble out of office.
While Kan's party had enough votes in the lower house to pass the new budget from next month it cannot muster enough support in the upper house to push through separate bills that would make the budget function.
Mayor Kawamura is eyeing the premiership for himself and believes his "tax cut-lean government" approach will win over an electorate disenchanted with the quagmire of national politics.
"If I were prime minister, I would cut the (5 percent) sales tax by one percentage point," said Kawamura, who proudly touts his local accent and often sports a baseball team cap in his frequent TV appearances.
The allure of his "Tax Cut Japan" for disillusioned voters and the possibility of alliances with other local parties as well as rebel DPJ lawmakers are only adding to Kan's considerable troubles.
Kan's shift away from early ruling party promises to put more cash in consumer hands by cutting wasteful spending when they took power in 2009 has upset some in his own party, especially backers of power broker Ichiro Ozawa, a former DPJ leader now under indictment over a political funding scandal.
NOT DEBT, SAVINGS
Kawamura argues that reducing taxes is the best way to stimulate growth and root out waste, and dismisses worries about dangers for markets and future generations of failing to cut public debt that is already twice Japan's $5 trillion economy, although nearly all in the hands of domestic investors.
"In effect, Japan's public debt is public savings. U. s. ratings agencies said Japan's finances were in crisis and cut its ratings, but interest rates fell anyway," he said, referring to a sovereign debt downgrade by Standard and Poor's and a warning by Moody's.
Kawamura, who won almost 70 percent of the vote in the Nagoya mayor race, has tapped a deep well of dissatisfaction with both the Democrats and the long-dominant, conservative Liberal Democratic Party (LDP), which suffered similar criticisms before it was ousted after more than half a century of almost non-stop rule.
"We wanted things to change but it seems like the two main parties have become just the same," said 72-year-old Yasuo Kitagawa, who voted for Kawamura in the February mayoral race.
"I think young politicians in their 30s and 40s should come together to create a new party."
As much as, or more than, his call for a permanent 10 percent cut in residential taxes, Kawamura's push to halve city assembly members' salaries to 8 million yen ($98,000) resonated with voters.
The plan was rejected by the assembly and Kawamura resigned mid-term to seek a fresh mandate. Cutting his own salary helped, as did a talent for entertaining patter in TV appearances.
"I didn't really understand about tax cuts, but I liked his style," said 21-year-old college student Chisato Yamada, taking a break before heading home from a job interview.
Such reactions worry DPJ politicians especially, but also those in the LDP, given the growing clout of independent voters.
"From the start, DPJ supporters were independents who ... tend to react based on emotions, not political principles or ideology," said Yoshihiro Ishida, a former DPJ lawmaker trounced by Kawamura in race to be mayor.
"So they change direction suddenly."
Kawamura's simple message may well be duplicated by candidates trying to distance themselves from established parties in local elections in April, where a big defeat for the DPJ would boost pressure on Kan to quit.
"Anyone can imitate it ... so I think this movement could spread nationally in the April elections," said Nagoya University professor Fusao Ushiro, a former Kawamura backer-turned critic.
Kawamura, a former DPJ lawmaker who had tried to run for party leader in the past, also hopes it will appeal at the national level if Kan or his successor is forced to call a snap general election in return for opposition help in passing bills to implement the $1 trillion budget for the year from April.
Kawamura says his goal would be to win at least five lower house seats, though he is coy about running himself soon.
Some of Kan's critics in the DPJ, such as former internal affairs minister Kazuhiro Haraguchi -- an Ozawa ally and wannabe premier -- are also eyeing tie-ups with Kawamura.
New DPJ lawmaker Yuko Sato from Aichi prefecture where Nagoya is located told reporters on Thursday she was leaving the party and would now back local Tax Cut Japan.
Few think Kawamura's party has much of a future on its own, but some analysts and politicians suspect it will play a role in what could end up as a major shake up of national level parties.
Ozawa, a veteran political strategist known for shaking things up, may try to capitalize on Kawamura's popularity either to regain control of the DPJ or fracture it as a prelude to reshuffling Japan's two main parties into to create groups that are more ideologically cohesive than the DPJ and LDP are now. It is unclear to what extent Japanese voters, most of whom surveys shown think a sales tax hike is unavoidable, would back calls for tax cuts at the national level, especially if they spelled reductions in social services. "It's not enough to have good slogans. What we need is someone who can implement policies," said Kazuo Kato, a 52-year-old Nagoya businessman who wants like-minded members of the LDP and DPJ to form a new party. "Previously under the slogan of 'policies for the people', politicians just threw around money and piled up debt, and you have to question whether that was right."
(Editing by Jonathan Thatcher)