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How big an impact would the proposed initial sales tax hike from 5% to 8% in Japan have on your lifestyle?

25 Comments

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25 Comments
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None.

-4 ( +1 / -5 )

NIL. I will reduce my consumption to the limit that my savings may go up a little :)

-2 ( +0 / -2 )

A 3% change.

5 ( +6 / -1 )

None. Still have to eat. Make any big purchases between now and April!

0 ( +1 / -1 )

It will impact my life between 5% and 8%. I'm pretty sure.

-1 ( +1 / -2 )

I may eat out a little bit less than before but that's nothing big. The real impact comes from my total loss of faith in government to act responsibly. I was here in '97 when they promised that one more, just one more tax increase was needed to help "the less fortunate" and kill the debt. Well, that money was wasted and now they're back for more. I have always believed in paying my fair share of taxes but now I'm beginning to wonder...

2 ( +3 / -1 )

I will cease to buy items that are not on sale. That includes groceries, which get marked down about 90 minutes before the local supermarket closes.

0 ( +0 / -0 )

3% sounds insignificant, but it is not. Take a moment to figure out how much 3% of your spending is each year, and then think about what you might have done with that money. For the average Japanese family with an annual disposable income of 450,000 yen (which is about 1/3 the average disposable income of an American family) the extra cost will be13500 yen per year. This is roughly the amount that Japanese put aside to educate their children. This tax is going to hurt a great many families.

For you English teachers who don't earn very much to begin with, the difference may seem small, but it affects you more than it affects professionals and expats who earn better salaries. The lower income earners in Japan (which are more than half the population) who count every yen when shopping are going to be especially hurt.

The government has announced a huge "stimulus" program to go along with this hike, which means any chance the tax may have had at reducing the debt has already been shot in the head. This 3 percent increase in tax will likely result in a 6% increase in spending, following the past example.

-3 ( +1 / -4 )

I will spend a lot less.

0 ( +0 / -0 )

None.

I will spend a lot less.

This makes no sense. Why not spend "a little less" instead. Can you calculate 3% of 100 yen? It's "a little," not "a lot."

0 ( +0 / -0 )

I don't intend to let if affect my life one way or the other.

0 ( +0 / -0 )

Buy less AKB48 magazines

2 ( +2 / -0 )

No more putting my one yen change in the plastic donation container by the convenience store registers

2 ( +2 / -0 )

There is always hysteria surrounding the implementation of a tax like this, but there is evidence showing that it does not impact lifestyle and consumption patterns at all, apart from an initial dip. Consumption levels quickly return to normal.

Australia introduced a Goods and Services Tax in 2000 - a straight up 10% tax where there had been none before. There were all kinds of predictions of the dire consequences of the tax. Much like, well, much like the Armageddon-like fear that seems rampant on JT over a 3% rise at the moment.

After a surge in spending prior to the tax, and a dip for a quarter afterwards, spending returned to normal. University studies prior to the tax implementation suggested the Real Estate market would fall by up to 12% - it in fact boomed afterwards for 8 years, until the GFC.

The fact is, it won't change your lifestyle, it won't ruin your life and it will be very good for Japan in the long run.

I'm guessing most people will barely notice it.

0 ( +1 / -1 )

Not much, I only visit twice a year, albeit for extended periods of time. From 5% to 8% is actually a 60% increase in tax, but tax is but a small part of what we pay. Better for Japan to get itself out of debt and back into being a responsible pay-as-you-go democracy than yet another suck-at-the-teat miscreant on the world stage.

2 ( +2 / -0 )

There is always hysteria surrounding the implementation of a tax like this, but there is evidence showing that it does not impact lifestyle and consumption patterns at all, apart from an initial dip. Consumption levels quickly return to normal.

The tax was raised to 5% in 1997, and this caused serious harm to the economy at the time. It is arguable that the economy has still not recovered partly due to the 1997 increase. And of course, the previous tax hike precipitated even heavier government squandering.

In the end, the newest hike will likely have the same results as the last one.

Those who fail to learn from history are doomed to repeat it.

-5 ( +2 / -7 )

And of course, the previous tax hike precipitated even heavier government squandering.

Government spending is a whole different issue. At the end of the day, you get what you vote for - and the Japanese people continue to endorse the LDP and their spending ways. So, either the electorate demands a halt to the stupid government spending, or, they choose them again, and pay the money they owe as a result of their endorsement of these policies which are performed on their behalf.

1 ( +1 / -0 )

I assume that I will be 3% worse off. If I were a voter, I'd be pestering my local MP for the government to cut unnecessary costs in order that this tax hike will have the desired effect, rather than simply fund more concrete river beds or other ridiculous public works projects designed to create employment.

1 ( +2 / -1 )

It's going to cost me roughly an extra 18,000 yen per year in groceries for my family. I can imagine worse fates.

I agree with Baibaikin, though. It would be nice to see a measure of common-sense spending pursued by local governments in conjunction with the tax increase.

On the bright side, we're all now going to have a chance to empty those 1-yen jars. :D

2 ( +2 / -0 )

A 3% increase in sales tax means at least a double increase at the check out. So, this 3% increase will mean a 6-8% increase at the check out. The proposed 5% increase will mean a 10-12% increase at the check out. This means, if you disposable income is 20,000 yen per month you will lose 10% of it. It is the first step to a snowballing inflation rate. The Japanese economy will go from deflation to superflation in a matter of months. It's just the beginning of a very sticky end to the Japanese economy. Don't forget, pension payments are being reduced while pension and health insurance premiums are being increased. The corporations have already indicated they won't be passing their tax cuts to workers. Utility costs are increasing, especially electricity. The list of 'gimme' just goes on and on! Doom and gloom!

-1 ( +1 / -2 )

A 3% increase in sales tax means at least a double increase at the check out. So, this 3% increase will mean a 6-8% increase at the check out. The proposed 5% increase will mean a 10-12% increase at the check out.

How do you figure?

1 ( +1 / -0 )

It only takes 100,000 people holding off on a 10,000 yen expenditure to make a billion yen dent in the economy. If employers don't increase wages, there are going to be a LOT of dents.

0 ( +0 / -0 )

Cheaper beer maybe even though the tax on beer is already like 100%... My main thought is when do I hear the proposals for spending cuts. The debt will be 3 times the economic output soon, taxes going up, my life getting harder, but no word of cutting spending....

0 ( +0 / -0 )

If it happens in combination with inflation and no wage increases then I think I'll relocate my lifestyle.

0 ( +0 / -0 )

buy cheaper and more from abroad and sales... the idea will backfire ... specially since there are no benefits to the people being introduced

0 ( +0 / -0 )

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