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Do you think Japan's consumption tax rate should be raised from the current 5% in order to restore the nation's fiscal health?

31 Comments

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31 Comments
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No, the government should stop wasting the bloody money we give them now.

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@thepro-Cheers! I'll drink to that post! Good one.

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The last time they raised the consumption tax ('98), the economy took a big nosedive. But the survival of so many of government services (retirement, health care etc.) depend on more income.

Agree with thepro, they've got quit wasting what they're getting in conjunction or it's all for nothing.

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no..it will just go to waste...well said Mr. pro

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At least the consumption tax is the only tax that even crooks have to pay.

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Yes, but also cut wasteful spending.

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If Japan stopped buying IWC votes they would be able to lower the consumption tax.

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Of course not. It won't restore Japan's fiscal health. The gov't has shown no ability to restrain its spending. The pattern of increased spending and debt will continue.

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Remove all taxes on food, home rent and medicines to zero and I'll go along.

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Yes, it's far too low compared to other countries. UK is planning on going to 20%. WOW!

I hope they implement different tax rates on food and other household goods though.

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First, reduce wasteful government spending, then remove taxes on food and medicine, then raise taxes a bit - like, 1~2% not 5%. The hard part is Your Wasteful Spending is MY Essential Services and vice versa.

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I am no economist but I think Japan could improve its economy by phasing out those scrappy little one yen coins.Australia got rid of the 1c and 2c coins years ago.I get sick of having a wallet laden down with one yen coins that tend to fall out everywhere.

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Stopping or meaningfully reducing the government waste is a pipedream so yes, raise the consumption tax to 10%. Exempt items like rice, fish, fruit, vegetables, female sanitary products and medicines. Increase it for items like alcohol, tobacco, brand clothes and luxury items. And maybe raise non-taxable earning level to provide an additional protection for those with low incomes.

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What thepro said, and what Disillusioned said, and the first bit of what Beelzebub said (I'm still not going along).

I get sick of having a wallet laden down with one yen coins that tend to fall out everywhere.

Quick tip: When you buy stuff, instead of paying in notes and getting a handful of change, try counting out some of your loose change. It stops your wallet getting laden down and helps the cashier when the next notes-only buyer comes along.

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Slash gov't spending, but don't touch education.

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Sure. The problem with consumption is the lack of wage growth and overcapacity. A tax hike will take a short-term one-off hit and then we go back to a slow downward trend. But don't forget to cut the corporate tax at the same time.

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The govt has to show it can properly manage what we pay now, which woefully they CANNOT so the answer must be NO to a tax increase, unless they can properly manage wud we give them already.

First they need to do this:

Cut all ministry budgets by 30% & let them figure out amongst themselves what is cut, if they cant do it themselves then the next yrs cut goes to 35%.

This wud go a huge way to turning things around, the waste HAS TO GO!

The food & essentials need to be tax free, then we can look at MAYBE an increase.

If we just allow an increase ALL of the increase will be 100% guaranteed to be wasted

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Not as the first option. AS everyone else has said, they need to stop all their money wasting projects - construction, buying votes for whaling, all the trips... They should be raising the cigarette tax/prices as it is so far behind other developed nations it is shocking. While they are at it, alcohol as well. Luxury tax on brand name good. Don't hurt the lower and middle classes.

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Yes, raise it to 10%, then 15%, then even higher. No need to cut "wasteful spending" since there just cannot be any to cut.

Higher taxes are a necessity of life.

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There will always be waste. It is our job to say that they should cut it, but cutting it all is impossible, and everyone knows that. Besides, one man's waste is another man's paycheck, so what are you going to do?

Should the consumption tax be raised? No. It is unnecessary.

Paul Krugman has gone on record recently as saying that paring long term debt by sacrificing growth is a stupid strategy. He is right about Germany, and he is even more right about Japan. Especially when Japan is paying 1% for long term debt and could lose two percentage points of growth from a tax that would not make a dent in the total debt.

Japan should do what the market wants it to do. Print more yen. Sell more bonds. Get some growth going.

Wanna see the math? The JGB rate is 1.16% That means that if Japan makes NO payments on the actual debt, it will double in about 62 years. Big deal. I will be dead by then. What about my children? They will be retired then. My grandchildren? I might not have any, but what about yours? Well, if Japan can achieve 2.5% growth, then its GNP during that time will quadruple. But let's say that Japan can only achieve 1.16% growth.. what then? Well, it will be in exactly the same situation in 62 years that it is in right now. Yes. That's right. Japan can "fall" for 62 years at this rate and not hit bottom.

Put very simply, the best thing for Japan to cut its debt to GNP ratio in half in the long run is to borrow, invest, and grow. NOT tax and shrink.

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no, I am not to blame for stupid spending! I dont need concreate rivers when the old ones were more beautiful!

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Stop paying for the American bases. It cost a lot for the upkeep of their bases, rent payments and employee wages. Let the Americans pay for their own forward deployment bases. They are not used to defend Japan, so we should not be stuck with the bill?

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No.

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YuriOtani- you really have NO clue do you. Japan pays about 1% of the whole US military budget. You Japanese seem to forget that a country needs national defense. You and 126 million are indeed lucky (1 million in guv). I recommend you read a bit of history of your own country- you lot got off easy and handed a constitution with capitalism-even financed in the late 40s and 50s. Japan got rich. As for the tax increase refer to my post below.

my2sense at 08:22 PM JST - 22nd June It is like a nation of people with their head in the sand hoping reality will pass them by yep- you can say that again. Unfortunately, all excessively good things must end. To cool the inflated economy, the Japanese government raised rates. Within months, the Nikkei stock index crashed by over 30,000 points. At its height, the Nikkei stood at 40,000. The Nikkei could crash this far because its value was inflated on false hopes and hype, not solid financials. Eventually, many scandals came to light showing the corruption that always occurs in a bubble’s heyday. Japanese housing prices plummeted for 20 straight years. The Nikkei sank until its low of 8,000 in 2003. The Japanese government and corporations are still suffering under unwieldy debt loads gained since the late 1980’s. This debt was used for stock speculation and buying overpriced land. Even today, in 2010, the Japanese economy will remain in the doldrums. And in the end just like America- the public pay. When you walked around Japan in the mid 80s- no cell phones and people laughing all the way to the bank (that's where safe Japan came from). The good times have been over and now its time to pay up. Hope the geezers of the nation enjoyed the sushi and hostesses....

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I also recommend reading Nihonjinron http://ja.wikipedia.org/wiki/日本人論

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No, never. Fiscal mess Japan is in should be fixed only by significant cut in spending. Increasing taxes will leave economy if shambles.

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yuriotani,

yep you really dont get it, if the US left the cost to Jpn wud be many many times more expensive & you wud have to recuit yr own to defend Jpn.

Jpn has gotten an incredibly cheap & extremely profitable deal over the past 60yrs, Jpn owe the US a MASSIVE debt.

Oh and Jpn has gotten to parade around taking the "moral" high gound on nukes, all the while being under the US nuclear umbrella.

And btw I aint from the US but its pretty obvious to meal that Jpn has one hell of a good deal going, sure Okinawans pay more for it & they shud take it up with Tokyo & make the rest of the ungreatfull mainlanders take a few bases or ask the yanks to leave, as its ALWAYS BEEN, its Jpns choice, so what are you going to do.

And if you kick out the yanks you can expect the consumption tax to jump 3x maybe 4x to pay to expand yr military, and try to guess what yr neighbours wud think of that!

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meal shud be me haha

time for lucnh!

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Increased consumer tax can only be a good thing if it reduces consumption. The planet is overtaxed and needs a break. Just hope they leave beer out of it till the end of the summer though.Has been pretty hot today

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I think a moderate raise of 2~3% is needed but at the same time other spendings, etc should also be reviewed.

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Leave food out of it as well. Why should a kid buying a few lollies have to pay consumption tax? Hike up the cigarette and alcohol prices for crying out loud !

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