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Kishida rules out tax hikes to fund more childcare spending

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Actually the nearly non-existant, and in the red birthrate isn’t something that can be propped up and boosted by monies.

So what are you going to do with the cash?

3 ( +13 / -10 )

Of course he is not going to announce a tax hike as he decided to call an early election.

I very much doubt, even if I wish, that the government will cut public expense in large enough amounts to finance this.

More likely it will be more kicking the can down the road with more money printing to finance even larger public debt. Future not so bright.

6 ( +11 / -5 )

Kishida rules out tax hikes to fund more childcare spending

The insurance , residence and associated taxes which are very stealthily keeping the working poor poor look to be on a track to rise.

Not raising the consumption tax keeps all those LDP voting pensioners semi-content.

Meanwhile Kishida can bask in some G7 posturing publicity, from his hometown.

-1 ( +7 / -8 )

As a general principle, we are not considering asking for more tax burdens, 

Right, your policies are letting the private sector do it for you! Just the increase in food costs alone has hit pocketbooks hard, and next months increase in electric bills, for everyone except Kyushu are going to make it even worse.

5 ( +10 / -5 )

Print the money needed and get the BOJ, a public sector institution, to buy the bonds. The bonds' coupon payments are then remitted back to the Ministry of Finance, and after 10 years, the bonds roll off the BOJ's balance sheet -- ie they disappear.

Why all the hang ringing?

0 ( +4 / -4 )

Kishida places priority on boosting child-rearing support, seeing dwindling births as a "national crisis."

It is.

He has said whether Japan can reverse the downward trend before 2030 will hold the key.

It can't.

-12 ( +6 / -18 )

How would doubling Japan's child policy budget tackle falling birth rates?

Japan’s own MHLW data shows that 72,430 new child care slots were created in fiscal 2013, 146,257 in fiscal 2014, and 117,250 in fiscal 2015. PM Abe’s fiscal 2016 budget included nearly 120 billion yen on child care.

What was the impact?

Japan’s fertility rate fell from 1.43 in 2017 to 1.42 in 2018, 1.36 in 2019, and 1.34 in 2020.

3 ( +7 / -4 )

So the dip below 800,000 births per year came 8 years before government projections, which were already pretty dire, and they're not going to do anything about it until 2030? Good grief.

2 ( +5 / -3 )

The government should first review its spending in other areas and focus on making the economy stronger to have a robust financial base that will enable the funneling of necessary funds to strengthen child-rearing support.

What a mouth full of guano here! Government review spending...... oxymoron, with an emphasis on the "moronic" as what government entity anywhere is going to voluntarily agree to cut their spending so other areas can be increased?

I personally know for a FACT that government entities go out of their way to ensure 100% or more of their budget is needless wasted before the end of the fiscal year, or they face having to return the money, and have two things happen, No 1 Be forced to submit a ream of paperwork explaining in minute detail why they didnt use all the allocated funds that they requested the previous year. and No.2 see their budget cut, the following fiscal year, by the amount they paid back.

This comment is purely PR for the masses!

-7 ( +7 / -14 )

Under consideration is to increase social insurance contributions to cover part of an annual spending increase of around 3 trillion yen

Like that ain’t a tax…

9 ( +9 / -0 )

Is there any evidence that the spending rationale even makes sense as a way to increase birth rates? They’ve been throwing money at it for years now and it is just getting worse, would love to see the decisions actually be justified.

Throwing even more money at the problem still won’t improve it while companies keep pushing women to “retire” when they become pregnant. Maybe it’s time to finally accept that a large number of women actually want careers, and focus on getting companies to support that ideology instead?

5 ( +5 / -0 )

Well, inflation's effectively a tax hike, plus Yen not getting any stronger these days with BOJ Money Printer going Full Tilt, so more Inflation & Stagflation dead ahead!

Kishida's busy trying to put lipstick on a pig, never pretty, but worse for most of G-7, especially EU economic stagflation nightmare that's getting worse by the day...

-2 ( +2 / -4 )

Kishida places priority on boosting child-rearing support, seeing dwindling births as a "national crisis."

It is

And it is a crisis with all the other G7 Countries as well.

-2 ( +2 / -4 )

He has said whether Japan can reverse the downward trend before 2030 will hold the key.

It can't.

And you have crystal ball?

-2 ( +1 / -3 )

And it is a crisis with all the other G7 Countries as well.

Other countries have immigration

And you have crystal ball?

common sense

-3 ( +4 / -7 )

Global crisis, China 2011, 23.9M babies, 2022, just under 10M babies, seems very bad sign. Japan had 2.4M kids under age of 3, ending this March 31st, so 0, 1 and 2.

That's an average of 800k/yr only it's trending down about 5% per year. Furthermore, non Japanese kids about 50K/year born in Japan, almost all will leave.

Thus, Japan had approx. 2.25M Japanese citizens born in Japan in last 3 years. That's 750K/Yr., only again it's dropping, so likely for most recent year ending March 31st, 700K best case, probably bit less.

In other words, replacement population if things stopped declining of South Korea. No wonder Kishida and other world leaders are so worried.

BUt so long as you have G-7 global destabilization 'policy', NOT likely getting better on the baby front!

-6 ( +0 / -6 )

pay Kishida 800 yen / hour and no tax increase will be necessary.

-5 ( +6 / -11 )

So, this is like in the States when they raise the millage rate but claim they aren't raising property taxes. Or, when I was in Georgia and they didn't raise the automobile tax, but did raise all of the fees related to owning a car - tag, title, license renewal... My personal favorite was when they not only raised the cost of renewing your driver's license, but also shortened the length of the validity - pay more and more often. I don't know if that is cunning or diabolical or both.

4 ( +6 / -2 )

And just like that, everyone's supposed 4% pay increase just became irrelevant.

-2 ( +3 / -5 )

Actually the nearly non-existant, and in the red birthrate isn’t something that can be propped up and boosted by monies.

By the time it failed to improve, those existing collection can be easily diverted for another purpose, it happened recently.

https://www.japantimes.co.jp/news/2022/12/13/national/defense-spending-tohoku-tax/

-5 ( +2 / -7 )

Of course, sales tax will increase. How else is it going to fund, a) more pensions, b)higher defence spending,

c) more child care, d) higher medical costs, and e) service the debt? They're kicking the can down the road, but sooner or later, that road will come to an end. (Of course japan could bring in millions of immigrants who will increase productivity, and pay more in taxes) shuuuu! but don't tell the native population.

and no matter how much money you throw at the idea the birth rate isnt going to go up. Just taxes!

https://www.bbc.com/news/business-65478376

-2 ( +2 / -4 )

yildirayToday  09:07 am JST

Throwing even more money at the problem still won’t improve it while companies keep pushing women to “retire” when they become pregnant. Maybe it’s time to finally accept that a large number of women actually want careers, and focus on getting companies to support that ideology instead?

indeed it has been proven that countries with highest women job participation rate are countries with higher birth rate( Scandinavia countries, France for ex).

0 ( +1 / -1 )

Don't raise taxes.

6 ( +6 / -0 )

Throwing even more money at the problem still won’t improve it while companies keep pushing women to “retire” when they become pregnant. Maybe it’s time to finally accept that a large number of women actually want careers, and focus on getting companies to support that ideology instead?

The problem is a lack of flexibility. Anyone female or male should be able to take time out from work for any reason, not just child raising. It will be increasingly necessary for people to do it for caregiving for the elderly. The big problem in Japan is the inability of skilled people to get rehired. The easiest way to get a promotion or advance your career in the West is to get a new job at a new place. Not to stay at the place who knows you can contribute a lot but have you doing it on the second-lowest pay grade and are quite content with that situation.

2 ( +2 / -0 )

That's the company being content at not adequately rewarding the worker, not the worker being content.

3 ( +3 / -0 )

Japan's top income national tax rate is 45% (above 40 million yen aka $289k). The second tier is 40% above 18 million yen (just USD 130K!). After you pay your national income tax, then you need to pay a 10% resident tax. Then there is a 2.1% Great Tohoku earthquake surtax. So income tax is roughly 46%-56% for higher earers that would be "middle to upper-middle class" in the USA. Then there are 14.355% in social insurance taxes (there is a ~16.7 million yen cap on this to be fair). Then despite the "national health insurance", you still pay 30% of all healthcare costs. Then there is 10% consumption tax on everything you buy. If you die, your heirs will be taxed 40-55% on any substanstial wealth above $1 million. It's clear from the above that Japan govt, through the various web of taxatation, is taking more than 100% of the income of its highest earning people. And despite all of this, Japan has the worst fiscal debt to GDP ratios in the entire developed world.

And they want MORE taxes? Enough is enough Japan.

0 ( +3 / -3 )

"Kishida has to decide when the government will increase tobacco and other taxes to fund part of the increase."

But the gov't sacrifices some revenue by raising tobacco taxes because it owns 33.3% of JT's shares - lower sales generally means lower stock dividends. The gov't should change the law stating that it must own a certain percentage of JT's stocks and sell everything else. Billions of yen could be raised.

2 ( +2 / -0 )

Can't tax your way to prosperity, why places like Singapore and Dubai doing so well, less red tape and more like-minded business friendly global talent.

Real problem in Japan? After bubble crash here, nearly all in society expect Govt. to solve these problems that can only be solved by a healthy dynamic private sector.

BOJ, buying up ALL Assets, what could be worse indictor of Govt. Control & Lack of Private Sector Vibrancy? Scary

-1 ( +4 / -5 )

The design of a successful economic incentive scheme requires an understanding of the decision process at work. In this case, why are the Japanese choosing to have fewer children? (I say choosing on the assumption that there is not a widespread infertility issue.) Many people claim it is the cost of children but is there any evidence that the cost explains the entire reduction in the birth rate? The counter argument is the observation that country birth rates generally fall as gdp per capita rises, and the birth rate is higher for lower-income groups in many societies. A government plan to increase spending will only work if cost is the explanation and it makes potential parents better off. The latter cannot be taken for granted: for example, an increase in the consumption tax to finance childcare could actually make people feel worse off on balance - and reduce the birth rate further. If, as I suspect but without evidence to back up the claim, the falling birth rate is explained by a complex interaction of economic, psychological, and social factors, then simple financial incentives will have little or no impact.

2 ( +2 / -0 )

When you think about all the problems that the government solved by racking up 250% of GDP worth of debt, one does wonder if government spending money is part of a potential solution to the problem…. Rather than part of the cause…

2 ( +4 / -2 )

Certainly, Japan's median age now almost 50 and rising rapidly, not conducive to fertility but nice analysis Gareth, I'd say it comes down to 'confidence' in future, no reason to believe it's improving given experience since bubble burst, rather just opposite. Even Toyota and Mitsubishi, two surviving Japan Co. legacy pillars wobbling badly!

But the gov't sacrifices some revenue by raising tobacco taxes because it owns 33.3% of JT's shares - lower sales generally means lower stock dividends.

Amazing, BOJ ETF shares, not even capitalism, no other country does this. Anyway, you missed Govt. healthcare savings, as smokers are Govt. healthcare liabilities!

-1 ( +2 / -3 )

Was thinking, I don’t care if they hike “social insurance contributions” so long as people have an option to opt out of that.

But like a tax, we don’t.

It’s unfair that we all get co-opted into paying for the latest harebrained government spending plans, after the mess they have created so far.

But then we get to have a vote don’t we?

Oh yeah, non citizens don’t get a vote!

But we do have the option to “make like a tree and leave”.

Really hope for a miracle election result one of these days; life is short and it’s not getting longer

5 ( +5 / -0 )

Incompetent LDP regime who continues to fail economy with prioritizing large corporations' benefit expands inequality year by year, increases poverty or hunger at Japanese society, fall Japanese to most poverty among G7 countries. 

On the other hand, they are using trillions yen for costly US weapons or assistance to developing countries but dislike spending for own general citizen.

-2 ( +5 / -7 )

A proper cure addresses the cause, not the symptom Japan is a small country with limited resources, and most of the country’s jobs are in the crowded metro areas. People have neither the time, money, nor space to raise families. This isn’t a problem which can be solved by policy, mandates, or money. Animal populations also have upward and downward cycles influenced by resources and environment, not by their systems of government or economic policy. The government needs to adjust its policies to reflect economic reality, and not found them on a Ponzi scheme system which requires an ever greater amount of money be collected from an ever shrinking pool of taxpayers.

2 ( +5 / -3 )

Ponzi schemes for corrupt LDP cronies.

-3 ( +4 / -7 )

Good comment sangetsu, but “People have neither the time, money, nor space to raise families”, is a bit too much of a generalization.

Or perhaps it is generally true….

At least it isn’t for me, and our family knows many families with 3+ kids in Tokyo. Still, we may not be the general case.

Aside - Can I get a total income tax break since I have kids?

2 ( +2 / -0 )

So what? He'll just raise taxes and say it's for something else, and then he can use the money originally allowed towards that something else for childcare.

-3 ( +2 / -5 )

Rules them out…at least until after the election…..

1 ( +3 / -2 )

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