Japan's 'solidarity' quake tax may be model to foot pandemic bill

Households are bearing the brunt of the bill, paying an extra 2.1% in income tax for 25 years through 2037. For those with annual taxable income of 10 million yen, that equates to an extra 37,000 yen a year.

While companies were supposed to pay an extra 10% tax for three years, they were off the hook after two years, which critics say was due in part to pressure from the powerful Keidanren business lobby amid global competition to lower corporate tax rates.

For politicians, it's a model that works.

These sentences tell you all you need to know about the regressively taxing, corrupt corporatocracy you live under.

Reduce waistful spending by the government, at least put a freeze on government bueacatic Salerys. Why must those that work pay a "special" tax to cover their mismanagement?

Solidarity tax? But companies are excempt? That's not solidarity. That's just a abusiive tax on already over taxed workers.

This dangerous tax isn't needed, because Japan doesn't need to collect revenue in order to spend the money it issues.

Notice how the stimulus money starts being spent within days of being approved? How can that happen? There isn't the revenue available and no loans have been made. The reality is that the govt creates money by the push of a button, not through making cash transfers from one account to another.

For politicians, it's a model that works.

Yes, for politicians, especially the ones who never studied public finance, but not for everyone else. It'll put an unnecessary and tragic drag on the economy.

Japan spent 31.3 trillion yen on reconstruction from the earthquake and tsunami - roughly the size of Egypt's economy - with another 1.6 trillion yen earmarked for the coming five years.

Revenues from the special tax paid for about 40% of the cost, around four-fifths of which was collected from households.

How much of that was a wealth transfer upwards via the TEPCO bailout?

The devil is in the details and this is just as true for the stimulus bills now during the pandemic as well as for the one just passed through the US Congress.

It is a pity that the moneys is not used only to rebuild Fukushima instead of refitting factory ships for whaling or building roads in Okinawa.

Some lawmakers, such as members of the Japanese Communist Party, criticize the special tax as imposing too much of a burden on households. But their voices are few.

> The victims of the 3/11 disasters were used as pawns with a well-meaning public concerned with helping out in a time of group solidarity, imagining all that revenue was going to helping the victims in rebuilding and assistance.

Now we see all these news reports of many victims still left behind 10 years later, an afterthought while the actual beneficiaries whose shortsightedness was partly responsible for the extent of the disaster walked away risk-free.

Textbook disaster crony capitalism strategy.

What covid spending have they done?

As far as I see it we got ¥100,000 and 2 useless masks!

While in most other developed countries the population got far more money for those that lost income and jobs, businesses got support to cover payroll in order to keep employees even if they don't have work or the business like restaurants had to close.

It is such a mess here. My son's company had to shut down they closed the business permanently.

That was his main employment but because he has a second part time job he cannot get hello work benefits unless he also quits that 2 day a week online job. It seems the hello work system even during the pandemic is and all it nothing system

What happened to the billions of dollars in global donations?

You never see a poor politician.

Nobody mention the predicted earthquake and tsunami in Tokyo or Nagoya Or Wakayama/Osaka, or Fujisan’s predicted massive eruption.

Maglev anybody? Tokyo Olympics? US weapons and bases? Restarting NPPs?

So they want to tax the poor and middle class to pay for the loss of income that especially hurt the poor and middle class? Geniuses.

Branding it as a "solidarity" special tax helps convince voters the levy is for a collective good.

By "collective" they mean politicians and their cronies. There is no solidarity between these people and most Japanese, who they see as livestock to be used.

So thats how Japan will foot the bill.

I wonder how the other countries will pay for theirs.

Solidarity tax ?

Rather call it for what it is : peasant's tax.

How can you spend trillions of yens for projects which do not contribute to give more decent salary to those who will pay the tax, while politicians and amakudari jobs are everywhere so blatant.

"Solidarity tax" for our government? I am all for helping people who have suffered or go through difficult time. But not through taxes in here. Because the taxes will just end in the pockets of our politicians. They will never make it to the people who actually need them. Like come on, 10 years ago! So many promises back then. Solidarity tax my socks.. Remember when the consumption tax was raised to 10% from 8% few years ago? And do you remember all the empty words from our government?

10 years later, the government turned their backs on them. They are often considered as "面倒臭い" because many of them did not remain silent and not remaining silent in Japan means the person is considered as causing trouble, etc. The victims have become a kind of modern 部落民 to the government.

I have a better idea. Instead of just wasting horrendous money on useless meetings over and over and over again, treating NTT guys for luxurious dinners, stupid ideas like GoToTravel during pandemics, extremely overpriced abenomasuku and generally wasting money like a drunken millionaire, they could put the money to a good cause instead.

All this take of tax just forces me to imaging (any politician) digging into a steak dinner!

Anyway, I am off out of Japan this month for a rather prolonged period to make some real money-most of which will not be taxed!

Another tax!

After the last tax change regarding inheritance that in theory means even if I leave Japan before any inheritance but within 5 years of the time I remove my Japanese residency the Japanese government will try and claim the right to tax me or my family.

Seeing my parents are now quite old and it does not look like I can leave any time soon.

I actually had myself and my children removed from any and all wills back home.

There is no way what my parents worked for is ever going to end up in the hands of the Japanese government.

My siblings will get it all and if I finally get back to my country and after the period where The Japanese government can not even try to claim anything, them and only then my siblings will "gift" me my portion. If that day never comes then they are free to do with it as they please, just as long as the Japanese government doesn't get any of it so some politician can live the good life.

Antiquesaving:

I'm just wondering, what civilized country imposes taxes on foreigners for what they earn outside Japan? Not that I've got much, but if Japan wants to know if I have property or any inheritance abroad, then it will have to give me citizenship (and let me keep my original citizenship too).

Notice how the stimulus money starts being spent within days of being approved? How can that happen? There isn't the revenue available and no loans have been made. The reality is that the govt creates money by the push of a button, not through making cash transfers from one account to another

Nope. That is not how it works. Governments sell bonds to pay for the difference between tax revenues and spending. Those bonds can start being sold within hours of a decision to do so. But because they are bonds, they must be repaid with interest on the date of maturity. It is a real debt that must at some point be repaid. Too often governments issue new debt to pay the old debts on their maturity date.

Notice how the stimulus money starts being spent within days of being approved? How can that happen?

You ask a question. Then you go on to provide an "answer":

There isn't the revenue available and no loans have been made. The reality is that the govt creates money by the push of a button, not through making cash transfers from one account to another

An answer that clearly shows you don't know what you're talking about. Maybe you should have stopped your post at the question, and waited for the answer:

Governments sell bonds to pay for the difference between tax revenues and spending. Those bonds can start being sold within hours of a decision to do so. But because they are bonds, they must be repaid with interest on the date of maturity. It is a real debt that must at some point be repaid. Too often governments issue new debt to pay the old debts on their maturity date.

Now all you've done is gotten yourself angry about something you made up in your head, rather than the real-world situation that actually exists.

@DesertTortoise

Those bonds can start being sold within hours of a decision to do so.

"Can be" but usually arent. The UK wont starting auctioning its gilts until about a year from now for stimulus money now being spent. So where does the money come from? Answer: The govt spends it into existence. It doesnt need to borrow it or withdraw it from a savings account, like individuals and private businesses do.

Govt bonds arent debt: they're issued to soak up excess (untaxed) cash reserves and give holdings of surplus cash the option of earning interest.

@strangerland

An answer that clearly shows you don't know what you're talking about.

Haha. I know exactly what I'm talking about, that's why youre incapable of responding to my logical explanations. So, please dont comment, especially if your aim is only to denigrate the poster.

Now all you've done is gotten yourself angry...

Yeah, I'm "angry," LOL.

 The govt spends it into existence. It doesnt need to borrow it or withdraw it from a savings account, like individuals and private businesses do.

You are still incorrect. A government has to sell bonds to cover the difference between tax receipts and expenditures. That is not money out of thin air, it is borrowing someone else's money with a promise to repay with interest on the maturity date.

Now if you want to talk about creating money out of thin air, commercial banks do this every single day. The reserve requirement in the US at least for most banks is 4% of their outstanding loan balance. What that means is that when the bank loans out a dollar to a customer, say a business to expand or buy raw materials, the bank only has to have 4 cents of that dollar on deposit at their regional Federal Reserve Bank. The remaining 96 cents is quite literally money out of thin air. An entry is made in the borrowers account for the amount of the loan and it is real money in every sense counted as M1 in the money supply calculations, but a minute before the data entry was made that money did not exist. Business can also sell bonds to raise money just like governments do, or sell stock in the business. But it is bank loans that are literally money out of thin air. Bond sales including government bond sales are not as the buyers of the bonds have to pay for them with their own money.

This is why Japan won’t become a global financial hub.

My 45% not enough for you already?

Japan, South Korea and the US trade places each year as the nation with the third lowest tax burden of the three dozen most developed nations, those nations who are in the OECD. The typical Japanese tax burden, which is defined as government revenues at all levels of government from all sources as a proportion of GDP, is about 27-28% of Japan's GDP. All three nations, the US, South Korea and Japan have tax burdens that hover around the high twenty percent of their GDP. The only two, cough cough, "developed" nations with consistently lower tax burdens are Turkey and Mexico which are typically around 20% of their respective GDPs. The OECD average tax burden each year is around 35-36% of GDP. These stories that people are paying upwards of 45% of what they make in taxes is not born out by fact but are highly exaggerated urban legends. Now go ahead and vote me down for telling you the truth based on actual data from OECD and the World Bank.

There will come a point that the taxation becomes so high that there becomes an seriously noticeable impact upon spending by households. Until then, it's upwardly mobile without any accountability over how it is being spent.