3. Entrepreneur and his heirs.

When the founder of McDonald's Japan, 78-year-old Den Fujita, passed away on April 21, 2004, he bequeathed a rags-to-riches story worthy of dramatization. Born in Osaka, he was brought up bilingually and worked as a translator to earn pocket money during high school. After World War II, with his father dead and family home and most assets destroyed, Fujita started an import business, the profits from which paid his college tuition. He graduated from the University of Tokyo in 1951.

He remained in the import business and, as the story goes, ate his first McDonald's meal while on a business trip to the States in 1967. Impressed with the speed and convenience, he felt the Golden Arches had a future in Japan. Four years and numerous negotiations later, he won the right to become McDonald's joint venture partner in Japan. Fujita opened his first restaurant on July 20, 1971, on a tiny 50 sq. meter lot in Ginza, Tokyo.

Fujita took a huge risk in opening his first restaurant; back then everyone said that Western food eaten with the hands wouldn't sell in Japan. He proved the naysayers wrong. Today McDonald's Japan is by far the largest fast food chain in the country. In 2004 the company had 3,774 restaurants and sales of JPY308 billion (US$2.68 billion). By the time of his death, Forbes identified Fujita as the 437th richest person in the world.

Fujita's is a pretty good story and one that normally would inspire both journalists and future generations of readers to consider entrepreneurship and the meaning of life.

But instead what captivated the Japanese media was the inheritance tax that his heirs had to pay. He left a massive estate worth JPY49.1bn, consisting of real estate, bank deposits, and shares in McDonald's Holdings Japan. The inheritance was purportedly the sixth largest on record in Japan, and the tax hit punctured an otherwise fairytale ending to a productive life. The total tax, JPY-12.2bn, attracted widespread commentary about the fairness of hitting surviving families of successful individuals for death taxes especially after the person earned, rather than inherited, the money, and had already paid income and capital gains taxes.

Inheritance tax is a hot topic anywhere, and, because of a rapidly graying society where more than 30 percent of business owners are older than 60, nowhere more so than in Japan. The tax was introduced in 1905 and then modified by the Occupation Forces in 1950. It was meant to forestall the accumulation of wealth within certain business families, reinforcing the egalitarian aspect of Japanese society, where everyone is expected to work for their rewards, and everyone gets a chance.

This philosophy appeals to the masses, who wish to maintain the fiction that everyone in Japan is middle class; so the tax is structured to target a small, enviable segment of the population - successful business people and artists/celebrities who have made more than their fair share.

But in the last 20 years another segment of the population has come to be hit by inheritance tax. This segment, which has public sympathy, presents a problem for politicians. It consists of regular company employees grandparents living on modest plots whose value has skyrocketed. Many of these people moved back to the ruins of postwar Tokyo and Osaka and carved out a living under the toughest circumstances. They never made much money. They don't want to move, and they certainly don't feel rich or lead extravagant lives. So when they pass away, the tax bill comes as a shock to their heirs.

Because such people form a sizable voting bloc, the government has been trying to adjust the tax regime. One result is that the valuation of houses on plots up to 240 square meters in area has been reduced by as much as 80 percent. The deduction now stands at JPY70-100 million, depending on the number of heirs to the estate.

Regardless of whether you think the government has the right to make everyone start at zero (relatively speaking) in terms of economic advantage, the reality is that the families of successful entrepreneurs, artists, and the elderly in inner Tokyo are all slapped with a heavy tax when the main provider passes away. These heirs, in Den Fujita's case a 75 year-old widow and 52-year-old son, lose a large chunk of the family estate, something that does seem a cruel punishment considering how people like Fujita built their fortunes from nothing.

Until three years ago, Japan had the world's highest death tax rate, 70 percent. Now the upper limit is 50 percent. But, in fact, after deductions, according to the US-based Family Business Tax Coalition (FBTC), the effective rate is more like 30 percent. Today, says the FBTC, the G7 country that levies the highest effective death duties on people having estates worth more than US$1.5m (JPY172 million) is the USA. The FBTC says that although the upper level of estate tax in the USA is 46 percent (2006), the small number of deductions means that the averaged effective rate of tax is around 40 percent - about a quarter more than what the Japanese pay. And remember that this figure doesn't include US state death taxes, which are still levied by more than half of the state governments.

Another point about the US situation is that although the US$1.5m deduction is 50 percent higher than Japan's, the ongoing five-year old property boom has meant that there are now more than 9 million millionaires in the USA, about 44 percent of whom achieved their status on property, and most of whom will be paying a tax that they wouldn't have been five years ago.

Make a plan of presentation of Mr. Den Fujita business history.