Ruling party lawmaker wants sales tax ditched

"Pretty sure inheritance tax revenue would not come close to those of income tax."

Raising revenue isn't the primary reason for an inheritance tax. The primary reasons are to prevent the accumulation of large amounts of wealth over multiple generations in the hands of a few wealthy families, and the prevention of a class of idle wealth. Read Thomas Jefferson's writings on the subject of inheritance and primogeniture. Also read the writings of James Madison on the subject. Both greatly feared allowing wealth to accumulate over generations in a few wealthy families and strongly advocated that estates be broken up and distributed as widely as possible upon the death of the owner.

Why? Raise inheritance tax and remove income tax.

Pretty sure inheritance tax revenue would not come close to those of income tax. You would have to remove all exemptions on gifts as well.

Ando said the government's decision to raise the sales tax rate to 10% from 8% last October was a "clear mistake" because the economy was already in a downturn by then.

You know there are some serious chinks in Abe's armor when someone from his own party openly makes a statement that what their leader did was a "mistake".

"Introduce a progressive consumption tax and get rid of all income related taxes"

The fatal flaw in that idea is that the wealthy would simply invest their income so it doesn't show up as consumption and avoid taxation, exaggerating the already ridiculous wealth disparity one finds in most western and democratic Asian nations. It also doesn't address taxing corporate incomes.

Introduce a progressive consumption tax and get rid of all income related taxes. Generate the same tax revenue but encourage work and productivity. Especially if overtime were paid for!

"That said, I do not have a problem with sales tax (except on food). If the average Joe is going to be taxed, its the fairest tax I can imagine"

I'm an economist by training and by craft. A sales tax on normal consumption goods is the most regressive tax possible. It falls most heavily on those who make the least money. Here is what Adam Smith, one of the founding intellects of market capitalism had to say way back in 1775.

"The high price of necessities for the poor must be compensated by an increase in their wages.. It must always be remembered, that it is the luxurious and not the necessary expence of the lower class that should be taxed."

In Adam's analysis if you have the patience to weed through it you find that employers end up paying the price of taxes on the necessities in the form of higher wages. Otherwise their labor pool would dry up. It is counter intuitive to someone not trained in economics perhaps to see the world this way. Taxing the poor gets nowhere. Never has, never will.

"Exactly. This is why the middle class (the employees) will always be the most taxed and one of the large reasons the rich gets richer."

Read David Ricardo's "On The Principles of Political Economy and Taxation" (1817) for an understanding of the economic superiority of income taxes on persons and businesses. Ricardo didn't think, given the technology of his time, it was possible to do this but his analysis shows why taxes on incomes and profits cause the least distortion to the forces of a competitive market. You might also be surprised to read this quote, which is Adam Smith's First Maxim of Taxation:

" People should contribute towards supporting their government in proportion to their respective abilities.

Taxes should be in proportion to the revenue which they enjoy under the state's protection.

Government expence to a great nation is like the management expence to the joint tenants of a great estate.

Those tenants are all obliged to contribute in proportion to their respective interests in the estate.

The equality or inequality of taxation depends on the adherence or neglect of this maxim."

"Inheritance tax is most evil."

Read what James Madison and Thomas Jefferson wrote about inheritance taxes and especially Madison's opinions on the necessity of breaking up large estates among as many heirs as possible. For a nation that intends to govern itself (meaning electoral self government) allowing wealth to accumulate in too few hands is one of the great dangers. Power accrues to wealth and a people who intend to be their own governors have a strong interest in seeing wealth spread as widely and as evenly as possible to political power is not allowed to concentrate in the hands of a few wealthy people who will turn the government to their exclusive ends.

A wage tax is like a penalty for having a job.

Exactly. This is why the middle class (the employees) will always be the most taxed and one of the large reasons the rich gets richer.

Coming from a country with a VAT of 24%, the dispute between 10% or 8% VAT is really quite indifferent. As long as it's not 0%, as I'm actually supporting the taxes, as that's what builds the society. The 24%VAT is one factor in why we have free education, free well-kept libraries, very affordable health care for everyone, etc. back home.

They tax you at everything you do, except when you do nothing, you get welfare ...

Inheritance tax is most evil.

One of your ancestors made US$10M in 1950, so nobody in the family ever needs to work again. 4 generations later and the personality flaws in the family members due to lack of productive work and gold diggers has totally screwed the family. The stock market has made the initial amount grow to crazy levels, thanks to the early management not going crazy spending it.

Progressive inheritance tax is a good thing after a certain amount is involved. What that initial non-taxable amount should be is debatable. In today's dollars, somewhere between $1M and $5M is probably where the tax should go from 0% to 50%+.

There are multiple legal ways to avoid inheritance, at least in the US, by using family trusts structured in specific ways. Appears that Japan has similar financial tools based on a quick search.

High sales tax is non-progressive. Wouldn't a more socialist country prefer to use income tax or total asset taxes more to be "fair"?

The variety of taxes is appalling but the other huge drag is the salaries and pensions that these taxes fund. Like in many countries, the public sector employment must be huge. So you’re essentially paying taxes to pay for these folks (and of course the huge debt service).

For this alone I want Ando to be PM. Its not all in line with my thinking, but far closer than what the majority crook LPD usual suspects have to offer.

That said, I do not have a problem with sales tax (except on food). If the average Joe is going to be taxed, its the fairest tax I can imagine. What needs to go in the long run is income tax on wages. A wage tax is like a penalty for having a job. A sales tax is like a penalty for consumption, and consumption needs to fall cause its destroying the environment. Also, it seems to me that government budgets are WAAAAY too high and there is a TON of waste. Lower the budgets and cut the waste and sales tax can probably be lowered in the long run, at least.

As a temporary Covid 19 economic solution though, cutting sales tax is great because its effect would be immediate, unlike eliminating income tax.

Slickdrifter

Income Tax

Enterprise Tax

Property Tax

Consumption Tax

Vehicle related Taxes

Liquor, Tobacco and Gasoline Taxes

What gets me is we pay all these taxes to fund local and national government, but when I need a copy of my juminhyo - which is essentially just a print out - I have to pay for it! Why do I have to pay for special city authorised garbage bags?

These are just 2 examples of stealth taxes that also exist.

I only agree on lowering the tax rate, say from 10 to 5 % for a limited period of time.

and

Declare a 3-months tax-free holiday

What need to be taken in account is do-ability. When the tax changed, we had several article about not ready cashier thus some shop having to buy new one and in the end choosing to close to save money. So, the question is that even do-able ? Seems a full tax removable is perhaps easier on the cashier if it include some additional touch to choose in between 10% or 8% perhaps there is also the option of choose no tax.

If not, seems that will need working around like put back at 8%, point back system using the shop card, free compensatory items, exemption of some stuff or in some shop, ...

We can not ask shop to invest for a most likely temporary change.

In an ideal world, you would scrap it and introduce land value tax. That's tax on land, not on the value of the building on it (i.e., what people have done to improve it). LVT is the fairest form of taxation. Japan has "anti-LVT", land with a decrepit building is taxed less than flat ground. Since LVT hits the idle rich, real estate speculators and the general rentier class, this will probably take a revolution to happen.

I would leave taxes on undesirables like single-use plastic, goods with high embodied energy (pollution), gambling, cigarettes, etc.

If the sales tax was refused, the process would be complicated and make all shops confuse to change the systems. Besides it’ll take much time.

if it become effectively,, want to know how much will it impact on economic recovery.

@Bugle Boy

Why? Raise inheritance tax and remove income tax.

Consumption tax hits the worst off worst, especially when others spend less and jobs disappear.

Declare a 3-months tax-free holiday to encourage the cash rich, but risk averse Watanabes to order that new house, car, fridge, refurbishment, 12 massages for the price of 10, whatever, so that companies big and small can fill their order books and hire staff.

Inheritance tax and gift tax.

Inheritance tax is most evil.

A clear policy of taxation is the only creditable means of raising/balancing debt liability.

This revenue is essential to finance government spending, on healthcare, pensions, education, care for the elderly, the list is endless.   

The key is reform and restructuring, enabling an efficient and fair tax system. 

From my armchair on a Friday night, gin tonic in hand, home alone, this endeavor is not as simple as the ice cracks, without continued excessive government borrowing.

Also taking into account a pandemic discouraging economic activity.

Admittedly consumption taxes are regressive by design, the most venerable in society suffer dis-proportionally financially.

They we must factor the legion of part time minimum wage that are seldom paid a regular fixed income.

Their earnings fluctuate, many are perversely well-educated middle-aged men and women, sacrificed by government as the path of least economic resistance.

"We need to revive the economy by pushing the sales tax rate back to zero," he told Reuters on Thursday. "It's absolutely essential that Japan eliminate the tax altogether."

The full removal is extreme and highly unlikely to happen. I only agree on lowering the tax rate, say from 10 to 5 % for a limited period of time.

The consumption tax cut/suspension is quick and easy to implement, more suitable under the current crisis. Unlike other rescue arrangements, people wouldn't have to apply with many fill-out forms and visits, and wait (long). Unpopular "my number" ID is unnecessary. The government wouldn't need to pay commission fees to "agents" such as Dentsu for handling logistics.

Income Tax

Paid annually by individuals on the national, prefectural and municipal levels. Also known as "resident tax" on the prefectural and municipal level. The amount is calculated based on the net income of the individual person.

Enterprise Tax

Prefectural tax paid annually by self-employed individuals engaged in business activities. The amount is calculated based on the person's net income and the type of business.

Property Tax

Municipal tax paid annually by individuals who own land, housing and other types of depreciable assets.

Consumption Tax

Paid by consumers when they purchase goods and services. The rate is generally 10 percent. For food and drinks (except alcohol and dining out) and newspaper subscriptions the rate is 8 percent.

Vehicle related Taxes

A prefectural automobile tax is paid annually by individuals who own a car, truck or bus. In case of passenger cars, the amount is calculated based on the engine displacement. A municipal light vehicle tax is paid annually by individuals who own motorbikes or other motorized light vehicles. A national motor vehicle tonnage tax is paid by vehicle owners at the time of the mandatory inspections (shaken). A prefectural automobile acquisition tax is paid by persons when they acquire a car.

Liquor, Tobacco and Gasoline Taxes

The national liquor tax is paid by consumers when they purchase alcoholic beverages. National, prefectural and municipal tobacco taxes are paid by consumers when they purchase tobacco products. A national gasoline tax is paid by consumers when they purchase gasoline. The liquor, tobacco and gasoline taxes are included in the prices shown by shops.

ENOUGH!!!!! LET US HAVE SOME BACK!!!!

END SALES TAX NOW!

((((Notable others.)))))

Withholding income tax.

Restoration income surtax.

Individual inhabitant taxes, individual enterprise tax.

Inheritance tax and gift tax.

Self-assessed income tax.

Concept of residence and taxable income.

Not to mention every time you go through an ETC machine taxed there too.

It is unlikely to happen, but it does have the merit of being simple and putting money directly into the hands of the public. It seems to make far more sense than stupid ideas like aiding the tourist industry while infection cases are increasing by making people travel.

If they do that, there will be huge confusion and purchasing delays so as to avoid tax.

Yeah, right. They are going to move it to 15% within the next two years for sure. Or at least decide to.

Not going to happen, greed is greedy. And they really don't care about who pays their wages. They only want more and more money as they are Intilteled too.

ditch the tax and refund the money!