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Gov't to go ahead with sales tax hike in Oct 2019

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This will hurt my wallet when I move to JP but still the cost of quality goods is way cheaper than in US

-14 ( +3 / -17 )

In a bid to balance out the surge in demand before the hike and sharp fall afterward, the government said in the blueprint, released Friday, it will include "extraordinary measures" in the budgets for fiscal years 2019 and 2020.

Get ready for a big bump in economic news, which Abe will point to as HIS policies taking effect, him staying in office for a 3rd term (This September is the LDP election for their president who by default becomes PM) then watch as the economy dumps, the Olympics end up in red-tape, and Abe retires to let whomever follows to AGAIN clean up his and the LDP mess!

8 ( +9 / -1 )

Oh, and I hope people keep the companies and businesses who already raised their prices by 10%, feet to the fire and force them to keep prices the same, as they have been making a killing so far.

In particular vending machine companies, who typically do not use nor accept 1 or 5 yen coins, and raised prices by 10 to 20 yen already!

11 ( +12 / -1 )

10% is not small and will hit hard the poor. But when we think about maintaining our social welfare, we have to accept it. The sales tax is paid by ordinary people and they cannot escape from it. While corporations and riches will be dodging taxes in sophisticated manners to hide their profits.

8 ( +10 / -2 )

Why Japan doesn't follow the California model of exempting groceries and medicine from sales tax is beyond me.

25 ( +26 / -1 )

Very bad idea which will reduce the spending by the poorer people. Some items such as food should be sales tax free. Everything for children too.

20 ( +21 / -1 )

let them eat cake?

8 ( +8 / -0 )

This is especially true because, with spending on social security swelling...

This, I don't understand. Because I and nearly all other Japan residents pay for health insurance and pension OUT OF MY OWN POCKET...not through general tax collection. The insurance systems bill me every month for a considerable sum.

The pension I am to receive is only a tiny bit higher than my total out-of-pocket payments. I'm convinced someone or something is misppropriating a very large amount of public funds. Maybe some of its used to fund that Shinkansen connecting to the hometown of the Indian prime minister. LOL.

12 ( +14 / -2 )

Increasing the consumption tax hurts the aging population who literally built this country out of the ashes of the war. They are living on fixed income and at the minimum, food, and medicine shouldn't be taxed. The young, who need to support this society will be stuck at entry level salaries or minimum wage will not be able to pay for "big ticket" items because day to day expenses will not allow them to even contemplate making such purchases. How about reducing the pay, severence and perks of the elected politicians and also reducing their numbers for starters? These clowns are so out of touch with the average struggling household...

11 ( +12 / -1 )

It seems almost time for all taxpayers to accept 10% for the country. Shouganai-ne!

-4 ( +2 / -6 )

I'm sure Japanese politicians have heard about reduced tax policies for basic products like food, my guess is they just don't give a d*** about people.

13 ( +13 / -0 )

Congratulations, Japan has become a 2nd world country.

9 ( +12 / -3 )

Well, this news goes very well with the other article in today’s news about abenomics failing. Good to see them squeezing it in before the Olympics too. I fear that post Olympic Japan will be a financial desert filled with distraught consumers and an ever increasing number of bankrupt companies.

7 ( +9 / -2 )

Just for once I wish people would read the article and think.

1st, the consumption tax is going from 8% to 10%. 10% is very low. Look at Europe:

Austria 20%

Belgium 21%

Denmark 25%

Finland 24%

France 20%

Germany 19%

Great Britain 20%

Italy 22%

Spain 21%

Sweden 25%

So Japan's rate is very low compared to Europe's rate.

Second, PM Abe has extend education benefits. As the article stated:

Free education for young children will also begin on Oct 1, 2019, according to the blueprint. The government had previously said the subsidies, which apply to children in low-income households aged 0 to 2 and all children aged 3 to 5.

So the government has increase benefits, so it has to pay for it.

The government is trying to make it cheaper to raise children, so people will have more children.

-19 ( +5 / -24 )

I agree with econostats 100%. The economy is growing strongly now, and businesses booming, so a tiny increase of 2% will not affect the growth much.Furthermore,Olympic will grow the economy even more strongly, so the tax hike cant be felt.

And those complaining most seem to be from foreign nations. If they go back home, they will pay higher taxes! This small increase is needed to ensure living standard in Japan stays among highest in world,paying for hospitals and schools.

-20 ( +4 / -24 )

most Canadian provinces are at around 15%

-6 ( +1 / -7 )

Many of those countries with high rates of consumption tax also exempt essential items such as foods, medicine, education, goods for children and babies. That makes it easier for the large numbers of low-income people that now exist, and would be a good model for Japan, facing negative population growth, low birth rate and millions who are now classified as at poverty level.

16 ( +16 / -0 )

I doubt if most of us mind paying taxes (if the increased revenue is used effectively). My problem, especially with regressive taxes is that it hurts the have nots far more than the well-off. Meanwhile, corporations are sitting on literally trillions of yen but would prefer their employees eat cake. Then they lament our lack of spending to their neoliberal mouthpieces in the press. "I don't understand why people making the same effective wage for 30 years aren't willing to buy more shiny consumerist gadgets."

So, sure, taxes for education and health care, sounds great. But let's not lose sight of this larger dynamic--profits largely privatized in ever fewer hands (corps and their political amakudari cronies), while the money required to run this titanic ship of state comes off the backs of the working people who make these oligarchs rich in the first place.

9 ( +9 / -0 )

Just for once I wish people would read the article and think.

1st, the consumption tax is going from 8% to 10%. 10% is very low. Look at Europe:

Yeah, but do those countries pay two bucks for 12 green beans or 4 or 5 asparagus spears?

just askin

16 ( +16 / -0 )

@"econstats"

sure, most countries have a higher consumption tax, but most countries have a lower tax rate on basic products like food (f.ex. Germany 7% !!!).

In addition .... there's so much money the Japanese government makes besides this consumption tax. "Shaken" for a "regular" car, road tax, highway fees and so on. Where does all that money go to?

At least him (Abe) and his buddies should make life easier for those who need it, low income people, families with children, the older generation.

13 ( +14 / -1 )

Items like unprocessed foods, medicines and medical care, non-designer clothing and child care costs should be tax exempt. People earning less than a certain amount annually should be able to file for a refund of the sales tax they paid the previous year. Taxes on non-performing corporate assets should be increased to encourage spending and economic growth.

9 ( +10 / -1 )

So Abe claimed to postpone the tax hike twice, because the economy was too fragile. Meanwhile there's this JT article,

Japan's Abenomics stimulus program is sputtering just as the government and the central bank wanted to tap the brakes, heightening the chance they will be forced to fight the next economic downturn with a near-empty policy arsenal.

Please show us all how japans economy is no longer fragile.

The only reason Abe postponed previous tax hikes was because it would have hurt his ratings and the timing didn't fit his real agenda.

8 ( +8 / -0 )

Now that there are plenty of tourists coming to Japan, they should have the tourists pay this too. (or at least give people living in Japan some breaks in prices like so many other countries around the world do).

0 ( +1 / -1 )

Very bad idea which will reduce the spending by the poorer people. 

No, it won’t. They’ll be able to purchase less with the same level of spending. There will be an incremental drop in their living standard.

5 ( +8 / -3 )

Every time they have raised the consumption tax, they say it is to pay for social services, but they continue to reduce benefits while raising taxes.

11 ( +11 / -0 )

No mention of the previous plan to maintain a lower consumption tax rate on food. It seems like Komeito are being ignored (again). The question is: will Komeito have the backbone to stand up to the LDP and insist the LDP keep to the previous agreement? (The answer is no: Komeito are spineless stooges who do as they are told).

11 ( +11 / -0 )

Ditto the comments about food being tax free. Especially in Japan where food is expensive to begin with.

8 ( +8 / -0 )

egostats

UK. There are currently three rates of VAT: standard (20%), reduced (5%) and zero (0%).  In addition some goods and services are exempt from VAT or outside the VAT system.

9 ( +9 / -0 )

Every time they have raised the consumption tax, they say it is to pay for social services, but they continue to reduce benefits while raising taxes.

This is the global norm. Central bankers...pfff

There was too much wealth in the middle classes and then they started driving policy. That can't happen! So, the council on foreign relations, the IMF, the World bank and others are destroying the middle class to save themselves. Conspiracy theory 101.

1 ( +4 / -3 )

Now that there are plenty of tourists coming to Japan, they should have the tourists pay this too. thats not how taxation works, tourist coming to Japan will eventually go home, the goods they buy will go with them effectively making those goods an export item. The J gov like any other country has no tax jurisdiction over other countries, or other countries citizens they dont even tax their own cvitizens if they live overseas longterm, with the exception of AMerica. LOL. if you tax tourist goods you may as well tax all goods exported from Japan, this is plain stupidity as your just making your exports less competitive against other export countries, especially if thise countries already have tariffs on the imports your exporting. If its too expensive people foreigners wont buy it and you making nothing at all. Almost every export country doesn't tax their exports because of this, but it doesnt stop those countries from putting tariffs on those imports or subsidizing industries in their countries giving them a competitive against those imports. This is why we have the mess we do now with Trump

2 ( +4 / -2 )

WAIT! Japan needs to rebrand this as a carbon tax and signal it's virtues to the entire world while still bringing in cash to the treasury.

1 ( +2 / -1 )

I can see it already...

Government: “We had no idea that raising taxes would have such an adverse effect on sales and people would spend less because they have to pay more. Who could have predicted further stagnation? We trough people would heed our plea to please go out and spend more despite companies with new tax breaks not complying with the condition that they increase pay for workers? Honestly, no one could have predicted this. Nonetheless, the BOJ will start to its target of eight years ago and continue its effective methods; we have faith in Kuroda. And we ask the public to go out and spend more, for your nation! And... gosh darn it, where are the Yokotas? Time to vow we’ll resolve he abductee issue because people aren’t liking the economy at the moment.”

7 ( +7 / -0 )

Why Japan doesn't follow the California model of exempting groceries and medicine from sales tax is beyond me.

First off the consumption tax covers everything, at least now, but when this one goes into effect there will be a long list of items that are exempt from the tax, consumers have to be aware of what, and it's going to be a pain.

-2 ( +0 / -2 )

Just for once I wish people would read the article and think.

1st, the consumption tax is going from 8% to 10%. 10% is very low. Look at Europe:

Austria 20%

Belgium 21%

Denmark 25%

Finland 24%

France 20%

Germany 19%

Great Britain 20%

Italy 22%

Spain 21%

Sweden 25%

So Japan's rate is very low compared to Europe's rate.

No its not very low. just half the truth, like comparing water with wine.

Most of those "high" tax countries provide free medical care, free education, pension from 65 years and more,

where Japan only takes taxes and hide it under slushfunds for the next "difficult" election ( like in Nago, Okinawa, in Atomic Energy towns.. where the LDP politican only can win if he promises )

13 ( +14 / -1 )

@"Ganbare Japan!"

"This small increase is needed to ensure living standard in Japan stays among highest in world,paying for hospitals and schools."

Maybe you should see what people in other countries have to pay.

Example hospital. Once again (sorry that I quote this country again) in Germany people have to pay Euro 5 (max Euro 10) per day. Children up to 18 years of age are FREE! What does it look like in Japan? If I'm not all wrong you (or we) have to pay 30% of the bill out of your (our) own pocket. But maybe that's just a minor difference or "fake facts"?

Concerning the living standard, this chart might be of value: http://www.prosperity.com/rankings. Again, doesn't look too good (not bad either!) for Japan.

0 ( +0 / -0 )

@econstats- What do you think we are all morons here?

Just for once I wish people would read the article and think.

About the numbers and sales tax percentages you posted. Yes, it is agreed it is higher in other countries. The underlining issue here is the class brackets in Japan. We have not seen a salary hike motion in diet for a Nationwide wage or salary hike request in Japan since like. Oh! Never. Nothing official anyways. Just talk, talk, talk. Despite calls from Unions and the Prime minister himself to have companies raise its employees salaries.

It should be noted. Some companies have raised employees salaries to offset the higher cost of living in Japan.

 Big Japanese companies agreed on Wednesday to raise wages for a fifth year but many are expected to fall short of meeting Prime Minister Shinzo Abe’s 3 percent goal, adding to doubts the central bank will be able to hit its inflation target.-Reuters. March 18th 2018. However, smaller companies underneath the radar have not raised salaries.

https://www.reuters.com/article/us-japan-economy-wages/japan-inc-to-raise-wages-but-many-short-of-pm-abes-3-pct-target-idUSKCN1GP0X2

More taxes are fine. Cars, houses, education, purchase exemptions. Really all fine. Very cool actually. What about a sweeping raise across the whole country? When the middle class in Japan have money. They spend.

As usual. The Japanese government want more money and cry foul when economy is tanking.

3 ( +4 / -1 )

This is just a shell game. The increased consumption tax revenue is currently being used for stimulus spending (i.e. public works projects) to offset the economic damage caused by the increase in the consumption tax. Ridiculous! The government has no intention of using the future increase in revenue to shore up the pension system. It's a big con.

8 ( +8 / -0 )

@ghosthand : a large in japan is a small in the US but the same price.

3 ( +3 / -0 )

Fizz gets it.

There was too much wealth in the middle classes and then they started driving policy. That can't happen! So, the council on foreign relations, the IMF, the World bank and others are destroying the middle class to save themselves. Conspiracy theory 101.-What if I told you your conspiracy theory was not really a conspiracy theory at all.-Morpheus. No seriously. Look at Africa. The middle class have been devastated in most areas under the guise of taxation.

Look at the destruction of Black wealth.-https://jacobinmag.com/2017/12/obama-foreclosure-crisis-wealth-inequality. All tied to taxation.

Thank you IMF and World bank of Africa.

0 ( +1 / -1 )

encourage higher education in fields related to artificial intelligence.

Of course. Because the Abe government doesn't care much for actual human beings.

4 ( +4 / -0 )

its odd that the taxes never go down do they?

5 ( +5 / -0 )

I didn't realize part timers could afford cars and houses? Instant stagnate and falling wages come Oct

However, if the minimum wage passed 1000 yen/hr there would be more economic activity and more taxes paid that way.

4 ( +4 / -0 )

1st, the consumption tax is going from 8% to 10%. 10% is very low. Look at Europe:

have you compared prices of things or just tax?

5 ( +5 / -0 )

Folks, remember that this is 10% flat across ALL purchases, no exceptions.

From Kids Clothing to Luxury Yachts - 10%

Yeah, they're considering certain items to exclude... but really ?

Sorry, but wage increases haven't gone up, nor interest rates. So this is less likely to spur a population growth, and more likely to further increase the belt tightening going on in homes throughout Japan. The only people who benefit, are the Rich Politicians, and the Wealthy elites here.

4 ( +5 / -1 )

@Ganbare Japan! - I agree with econostats 100%. The economy is growing strongly now, and businesses booming, so a tiny increase of 2% will not affect the growth much.Furthermore,Olympic will grow the economy even more strongly, so the tax hike cant be felt.

Is this his sarcasm or optimism? It’s very far from realism. In fact, I’d go as far as to call it, surrealism.

7 ( +7 / -0 )

@klausdorthToday  12:39 pm JST

Maybe you should see what people in other countries have to pay.

Example hospital. Once again (sorry that I quote this country again) in Germany people have to pay Euro 5 (max Euro 10) per day. Children up to 18 years of age are FREE! What does it look like in Japan? If I'm not all wrong you (or we) have to pay 30% of the bill out of your (our) own pocket. But maybe that's just a minor difference or "fake facts"?

You do know that children in japan get completely free health care, right? Even the medicine is all free regardless of your income. In many high tax countries in Europe, parents still have to pay the medicine.

-9 ( +0 / -9 )

You do know that children in japan get completely free health care, right? Even the medicine is all free regardless of your income.

You do know that children in much of Europe get completely free education (even college), right? There is no comparison.

9 ( +9 / -0 )

@ "WeiWei",

I never denied that! But how about all the other aspects?

dmc27 brought up one point - education - in at least some countries completely free..

Another point would be child support from (and by) the government.

Again, Germany: roughly Yen 25.000 a month for the first child with increases for the next children.

This support will end latest once they turn 25. How about Japan?

And I assume I could continue this list on, and on, and on.

3 ( +3 / -0 )

WeiWei said - "...You do know that children in japan get completely free health care, right?...."

Actually that is not correct.

It is very region specific, even down to local govt level.

My city is free until end of Primary School(only changed 3 years ago - my kids missed out).

Next is Junior High for Hospitalization only. Doctor's visits, treatment must be paid for.

High School students must pay all.

And children can only get free / discounted rates if their parents are paying into the Health Insurance scheme. So if parent(s) are negligent in their payments, their children are not covered - generally. I paid about ¥30,000 a month to cover my last child and me. Wife is seperate.

Weiwei you must know this if you have kids in Japan.

11 ( +11 / -0 )

Just for once I wish people would read the article and think.

1st, the consumption tax is going from 8% to 10%. 10% is very low. Look at Europe:

Just for once I wish LDP bots were honest when pushing their narrative instead of cherry picking certain facts and assuming that most of us are simpletons.

You know well that you are selectively passing off each respective tax rate listed as across the board rate with no exceptions.....you know well that in a number of those countries there are lower rates or total exemptions for stuff such as food, medicine, children products etc....you know well that in most cases when sales tax rates were increased a number of other taxes were reduced or income tax brackets slashed to compensate the average taxpayer ( unlike LDP in Japan if parties in other countries proposed to purely increase taxes without compensation they promptly loose the next election )...and you also conveniently avoid mentioning as someone mentioned above that most of those countries dont pay Japan ridiculous prices for a piece of asparagus, watermelon or a kilo of rice...and dont have such beautifully hidden cases of multiple taxation like eg. my personal favorite... the Japanese highway rort where the highways that were built with taxpayer money and are supposedly maintained by amakudari companies through funds collected when the public pays shakken car registration additionally charge the average Taro each time he wants to go for a drive on that highway that was built and mainfained with his money in the first place.....and there are a mountain of other examples along similar lines.

So next time perhaps instead of providing selective info to support the case your bosses want you to post about maybe you could put together a more coherent argument...since this is not channel 2.

Ganbare Japan

I agree with econostats 100%. The economy is growing strongly now, and businesses booming, so a tiny increase of 2% will not affect the growth much

Of course you do...lol...but did you miss that other headline on JT today next to this article ? What was it....oh yes.....Abenomics' impact fading at sensitive moment for Japanese economy....

funny timing isnt it...:) 0

10 ( +10 / -0 )

..Abenomics' impact fading at sensitive moment for Japanese economy....

Yeah your right because as the article itself stated:Escalating trade frictions from U.S. President Donald Trump's protectionist policies are taking a toll on business sentiment, which turned negative for the first time in a year, according to a government survey.

-14 ( +0 / -14 )

Here is a list of exemptions in Germany:

Export supplies • Financial services (e.g. granting loans) • Insurance services • Buying and selling real estate • Long-term letting of real estate

Wow. Financial services exempt from the VAT

 theatre tickets and hotel accommodations.

Wow. hotels and the theatre exempt from the VAT. Sounds fair to me.

How about the UK?

a list of exemptions from the UK

Betting and gaming - including pool betting and games of chance Exempt

Bingo - including remote games played on the internet, telephone, television or radio 701/29

Lottery ticket sales

Online lottery games

and the big one:

Financial derivatives

Wow, so you don't have to pay the VAT in the UK if you want to bingo and buy Financial derivatives.

I have to admit Europe is really fair. LOL

-14 ( +0 / -14 )

 Doctor's visits, treatment must be paid for

Yeah how much? 2000 yen?

-12 ( +0 / -12 )

econstats - is your last post referring to me???

I was merely commenting on WeiWei's Fake News where he said all childrens health is covered. I simply said - No You're wrong. Who's talking about whether it's 1,2,3,4, or whatever thousand. Get a line on it.

And your cherry picking of tax exemptions in the UK for example is certainly worth a thousand chuckles.

You do know - Don't You? - that almost all food and under 14 yrs childrens clothing (Huge expense for families) is zero tax.

Or that the largest purchase a family will ever make is a home - exempt from vat - you know, to help the majority of low / middle income people who make up the greatest number of citizens.

Or that there are reduced or zero taxes on numerous things like domestic fuel - electricity, gas etc or magazines and newspapers.......etc......etc..........etc!

econstats - more clear posts please.

8 ( +8 / -0 )

I agree with econostats. Living costs, taxes etc are MUCH lower in Japan than EU and most developed nations. Healthcare cost is very low compared to US, where poor people cant afford hospitals and drug. The new TPP, led by PM Abe and vice PM Aso, will lead to much cheaper imported food, so Japanese have more money in the pocket.

So, people should stop complaining about tiny 2% tax rise. Japanese people will accept it and move on. There will be zero effect on economy.

-15 ( +0 / -15 )

econosats...

Same tactics hey...once again you purposely misinform by selectively cherry picking certain info whilst ommiting the rest. These LDP web PR team techniques might work when influencing Japanese social media with the average Taro either is unable or cant be bothered researching the relevant info but this is a JT forum and most of us have that ability. So whilst you attempt to trivialize the exempt or zero rated range of items in Germany and UK , a 10 second Google search brings up the following....

UK - The default VAT rate is the standard rate, 20% since 4 January 2011. Some goods and services are subject to VAT at a reduced rate of 5% (such as domestic fuel) or 0% (such as most food and children's clothing).[4] Others are exempt from VAT or outside the system altogether.

Germany - A reduced rate of 7 percent applies to certain consumer goods and everyday services (such as food, newspapers, local public transport, and hotel stays).

Certainly the LDP paying a good coin to dissiminate their alternative facts on the web deserve better return on investment than this poor effort..lol.

Gambare - the same applies.

The new TPP, led by PM Abe and vice PM Aso, will lead to much cheaper imported food, so Japanese have more money in the pockets

You mean the same TPP imported food category that J- govt is fighting tooth and nail to saturate with exemptions to keep prices high on a myriad of items to protect its farmer voting base to the detriment of your average J customer? Yep, thats the one.

Always entertaining

11 ( +11 / -0 )

No its not very low. just half the truth, like comparing water with wine.

Most of those "high" tax countries provide free medical care, free education, pension from 65 years and more,

Not true either as you refer to the European sales tax example in your posts. The tax pressure is up to 50% and more in countries who provide the 'free' education, health care, pensions etc. In practice people are paying 'own risk' and additional costs above their so-called free benefits.

0 ( +0 / -0 )

"Japan ridiculous prices for a piece of asparagus, watermelon or a kilo of rice.."

and Europe does not subsidy agriculture ?

The Common Agricultural Policy (CAP) is the agricultural policy of the European Union

CAP price intervention has been criticised for creating artificially high food prices throughout the EU High import tariffs (estimated at 18–28%) have the effect of keeping prices high by restricting competition by non-EU producers. It is estimated that public support for farmers in OECD countries costs a family of four on average nearly 1,000 USD per year in higher prices and taxes.

Only 5.4% of EU's population works on farms, and the farming sector is responsible for 1.6% of the GDP of the EU (2005).[85] The number of European farmers is decreasing every year by 2%. Additionally, most Europeans live in cities, towns, and suburbs, not rural areas.

The 2007-2008 world food price crisis renewed calls for farm subsidies to be removed in light of evidence that farm subsidies contribute to rocketing food prices, which has a particularly detrimental effect on developing countries.

-12 ( +1 / -13 )

Why Japan doesn't follow the California model of exempting groceries and medicine from sales tax is beyond me.

Greed?

8 ( +8 / -0 )

econstats - again sidetracked.

Where's your rebuttal re the tax discussion and your insight?

How about some gritty details on Abe's tax & other plans as mentioned in the article - you seem to have all the answers.

Perhaps Ganbare can help. His fingers on the pulse.

9 ( +9 / -0 )

I really don’t understand why so many people feel the need to compare with other countries. What happens in the EU or the US is totally irrelevant to Japan. If I calculate all my taxes, health insurance and pension payments, I am being taxed nearly 40% of my salary. Add to this another 10% in sales tax and I am paying nearly 50% if my salary in taxes. Yeah, the Japanese economy is booming, but 90% of the population is frigging broke!

4 ( +5 / -1 )

So, Abe and his synchophants still haven't learned the lesson that recession follows a consumption tax increase. Stupid is as Stupid does.

5 ( +5 / -0 )

and Europe does not subsidy agriculture ?

Of the many places I've been in Europe, I never once felt that the price of produce was highway robbery. I cannot say the same for Japan.

It would seem that either you don't live in Japan and thus don't know about these high prices, or you've never lived outside of Japan, and are thus oblivious to prices elsewhere.

Still, it does not make sense to compare Japan to many of the European countries to which you refer when the standard of living in Japan is lower.

4 ( +4 / -0 )

So, people should stop complaining about tiny 2% tax rise. Japanese people will accept it and move on. There will be zero effect on economy.

As stated in the article: "Abe [...] will be hard-pressed to ensure the tax hike does not stall the economy by dampening domestic demand as happened after the previous consumption tax hike in 2014."

The 2014 tax rise hurt the economy quite markedly. What's magically different this time?

5 ( +5 / -0 )

"Or that the largest purchase a family will ever make is a home - exempt from vat"

it is exempt from the Vat but not from the stamp duty or other taxes is it? 

Oh maybe you can explain the following headline:

UK property taxes soar past £80bn for the first time

British households are now paying more in property tax as a percentage of GDP and overall taxation than anywhere else in the world

Britain’s property taxes as a percentage of overall taxes were 12.5 per cent in 2016 – more than double the OECD average of 6 per cent.

This is my rebuttal. I didnt need Ganbare, but thanks.

-8 ( +1 / -9 )

"Or that the largest purchase a family will ever make is a home - exempt from vat"

Assuming of course they can buy a home. maybe you can explain the following:

One in three UK millennials will never own a home – report

Thinktank predicts half will be renting in their 40s and a third ‘by time they claim pensions’

Home ownership in England at a 30-year low, official figures show

Home ownership in England has fallen to its lowest level for 30 years, while the number of people privately renting is now higher than in the early 1960s, according to official figures.

I guess they won't have to worry about the Vat anyway. Since, they can't buy a home, they won't have to worry about taxes.

Stop worrying about Japan. Maybe you should worry about the UK

-10 ( +0 / -10 )

That tax exempt VAT on a new home - will still cost more, as each component has been taxed as the builder bought it.  It is only that final sales tax that will be exempt for the new home purchaser.  Please correct me if I am wrong on this.

Also, I believe that the exemption will only apply to newly built homes - so the used home purchaser will still be hit.

The tax increase wouldn't hurt so much if cost reductions were also planned - such as a reduction in the number of politicians, reductions of construction, agricultural, fishery, and forestry 'LDP vote support' payments, etc. 

Recently my local city tax folks held a 'what can we use our abundance of tax revenues' public suggestion forum - completely missing that they could simply reduce taxation to clear the bloat.

3 ( +3 / -0 )

econstats - thanks for the reply. I'm glad you could do it without Ganbare's help.

Firstly I have no agenda. I was simply replying to your comment re VAT where you cherry picked a few examples to give some cred to your beliefs.

I pointed out that there are some BIG exemptions in the UK - eg kids clothes, most food and buying a house.

Why on earth did you bring Property taxes & Home ownership into the discussion on raising the consumption tax?

I'm well aware of a myriad of "other" taxes that exist in all societies. Heaven forbid if I dragged them all up on here for some obscure reason when I was talking about your comments on the VAT.

And nowhere have I said as you put it, "Stop worrying about Japan". You must be confusing me with another poster. But now you've raised the point, as a citizen of Japan with family and friends here, I'm more inclined to be concerned about Japan than the UK (apologies to my Brit friends).

And personally, I believe Abe should introduce the tax as he has put it off more than once before, simply as a skin-saving device before elections. If had the fortitude of his convictions he wouldn't have worried about his popularity ranking and did what he promised. But then we are talking about Abe aren't we. Charade Man.

5 ( +5 / -0 )

It would be much preferable if Japan had a variable sales tax rate like many other countries. Essentials such as fresh food should be reduced or tax free, and luxury goods should be higher.

5 ( +5 / -0 )

LagunaJune 17  07:23 am JST

Why Japan doesn't follow the California model of exempting groceries and medicine from sales tax is beyond me.

Agreed. Unless Japanese policy makers are thinking to implement the food and medicine exemption, Japanese consumers will have less money to spend. Eventually it will shrink the Domestic Spending. If they seriously want to raise the consumption tax in 2019, this food and medicine exemption plays more critical role. These two things; Raising Tax to 10% and the Food and Medicine Exemption have to be implemented at the same time. As far as the US, I believe all 50 states are implementing the food and medicine exemption. I do not pay 8.6% tax on them in Colorado.

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I may add to my previous post listed above. Many US Economists have been suggesting that Japan needs to focus on the Domestic Spending Expansion Plan & Consumer Spending tax reform now. If Japan wants to eliminate Inequality, poverty and discrimination, invest more in education and needs to tax less to the poor.

2 ( +2 / -0 )

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