Japan's GDP revised up, boosting case for sales tax hike

It is a 5% salary decrease for everyone in Japan, these positive press releases do nothing for reality and the little man

Whatever goes up must go down. Only when and how far? The sales tax does mean that we will be spending at least five percent more on our daily necessities. That means the only practical thing for the ordinary citizen to do is spend less.

Well, nothing will kill fake GDP numbers than a REAL tax increase.

gogogo, Maybe you are talking of increase in consumption tax to 10%. It is hard for low income person, no doubt. For other people, tax is only on consumption, but there is other ways to use income, such as investment and savings. So it is not 5% salary decrease, really.

Kabukilover, I think many residents of Japan can do more to protect themselves from increasing taxes than reduce consumption.

Unfortunately, Japanese have lent too much money to Japanese government, which now has too much debt. As Japanese get older, they want Japanese government to repay them. Just interest to pay is huge number. 0.9% growth in one quarter is not the sufficient amount to boost tax revenues greatly. Japanese should be prepared to have taxes rise more in future, to pay back debts owed by the government. Otherwise, Japanese should accept that government can not afford to pay pensions any more.

Japanese must face the tough choice. Sooner is better.

Been saying for ages the economy is improving and here is solid figures, but we will still get the pessimists spouting their negative rhetoric.

Tokyo winning the right to hold the games will also boost the economy creating more jobs and adding to the recovery, my guess is the days of being mired in reccesion have passed for Japan now.

In time wages will increase to help offset the tax increase just need to be patient.

Further fiddling with an artificially created figure called GDP proves zilch point squat. However, raising a real number, taxes extracted from the little people WILL do real damage to real lives. AGAIN!

JeanValJean

Further fiddling with an artificially created figure called GDP proves zilch point squat. However, raising a real number, taxes extracted from the little people WILL do real damage to real lives. AGAIN!

Weak, you'll need to do better than that

StormRSep. 09, 2013 - 11:18AM JST

Tokyo winning the right to hold the games will also boost the economy creating more jobs and adding to the recovery, my guess is the days of being mired in reccesion have passed for Japan now.

In time wages will increase to help offset the tax increase just need to be patient.

Another classid from the poster himself!

Tokyo winning the right to hold the Olympics in 2020 will have very little beneficial effect for Japan as a whole. This is not 1964, when Japan used the public expenditure on the games to invest in the infrastucture which was so vital for a then developing economy. Japan now has a developed economy and any further investment on infrastucture is just the same old same old LDP bankrupt policy of bridges to nowhere and roads for bears at the taxpayer's expense. Of course it's good for the Japanese Triange (Construction companies, LDP and pen pushers in Kasumageseki).

Do you know anything about how wage negotiations are held in Japan? We get a one-off period of Japanese wage negotiations beginning in March, Shunto, and everything for the next 12 months is decided then. This sugar high of government monetary splurging will be finished by December and by next March companies will be pleading poverty, as they have always done since 1997, and base pay, because of higher costs of production (fuel and resources), has a good chance of staying the same at best.

The sales tax should go to 0. Making every point of sale record/charge tax information is very expensive. Also, menus and other tags all have tax printed. We could save the economy billions a year by bringing the tax to zero because it would make people more efficient and save ink on every package that is sold. It's a no-brainer.

and September data including consumer spending will be more rosy, no reason to delay consumption tax hike :(

StromR, " Been saying for ages the economy is improving and here is solid figures,…"

What's weak is believing that pack of lies. The concept of GDP is artificial itself, a fake number conveniently manupulated and fed to the easily duped.

The problem is wages will NOT increase. That has been the promise of trickle-down economics for several decades now. It does not work that way. The rich will get richer and companies will invest in labour saving machinery that will put more people out of work. If the little guy would actually see some benefit out of a tax increase, I would be 100% in favour of it but the system does not exist to benefit the worker. When I see minimum wage at 1200 Yen/ hour, I will begin to have some hope.

Those who have called this all BS are correct, the ONLY thing that's happened is the yen has been weakened some J-companies gain quick benefit & are doing so pretty much from the weakened yen NOT from any strengthening of the economy.

And yes the man/woman on the street will typically NOT see any increase in pay, hence their situation is static at best, for many its deteriorating . And folks a consumption tax increase to 8% is a 60% jump from 5%, and a 10% rate is a 100% jump from 5%.

If you count bonuses and overtime payments, gross wages have already increased and will continue to rise as the economy keeps showing signs of improvement.

Wait around until next February and you'll start seeing base salary increases across the board. All unions in Japan are already positioning themselves to demand a base salary raise. The last time they demanded a raise was in 2009...

The only thing that makes me nervous about the economy is the sales tax increase. I really think they should ajust the plan to a 1% increase per year until 2018 or 2019.

I have never come across any positive impact to the economy when a new Govt. planned a hike in any sale tax.

Increase in Sale Tax = Lower in Individual Earning

Increase in Sale Tax = Every1 has to work longer hours

Increase in Sale Tax = Govt. Politicians enjoy highflying

Increase in Sale Tax = Less Money to Individual Households

Increase in Sale tax = Bad Omen is coming.

I can go on and on with the list which can be never ending to any general street hard labourer or laymen.... please tell me what is so good about increasing sale tax, period!

Of course, tax is not good for an economy. However, Japanese government has massive debt. Increase in tax would occur in this context.

To repay the debt, Japanese government must either cut the expenditure such as pension payments, or raise tax and generate the inflation.

Raising tax and inflation have same basic impact of decreased real wage for workers. Japanese government prefers to do this, rather than cut the expenditure.

Personally, I prefer expenditure to be cut. However, politically it is impossible as voters do not think seriously about this problem. They will never vote to cut their pensions.

What is the real rise in GDP. Nice to use the nominal increase for rosy stats, but let's have better stats.