Just when you thought the Fed was trying to juice the markets, read this: TOKYO, Jan 24 (Reuters) - The government should introduce tax exemptions on dividend income and capital gains, a draft of proposals being debated by members of the ruling Liberal Democratic Party on Thursday showed. The group is worried about the impact on Japan of the subprime crisis and growing fears of a U.S. recession, which have sent global stock markets sliding. Japan's Nikkei stock average .N225 has fallen 15 percent so far this year to around 13,000. The draft also included a call for the Bank of Japan to cut interest rates back to zero and return to quantitative easing, a policy of force feeding banks with cash. The government should also consider establishing a sovereign wealth fund, the group said in the draft document. A group of LDP legislators, including a former financial services agency minister, Yuji Yamamoto, are meeting to debate the proposals. They plan to later submit them to Chief Cabinet Secretary Nobutaka Machimura. The proposed tax exemptions on capital gains and dividend income would stay in place until the Nikkei recovered to 18,000, according to the draft. Other tax breaks proposed included ones relating to capital spending and tax reductions on income tax when there is a wage rise. (Reporting by Reiji Murai) Wow. Whatever happened to free markets? Or are those only good when prices are going up? these guys even have a target for the market. Terrible, just terrible. Governments should be promoting prudent risk taking, not backstopping market participants.