Gov't considers 2nd sales tax hike delay as spending falls

"Abe raised the tax in 2014 to 8% from 5%, tipping Japan into recession."

Here's a radical thought; Roll back the consumption tax to the previous level, and then see what happens. We all already know that Japan's economy has gone into recession all three times the consumption tax was increased (first time was the introduction at 3%). At least try a DIFFERENT experiment.

Abe has long said he would only delay the hike again if Japan were to suffer a shock on the magnitude of the 2008 collapse of U.S. investment bank Lehman Brothers bank, which ushered in the global financial crisis.

His sales hike is going to do exactly that.

Honestly, reading this article, all jokes aside: Abe's lost it. Its the typical japanese reaction to a mistake: just keep doing the same thing and pretend no one takes notice of your mistake..

Only EVERYONE WILL notice. They already have. Abe is at the helm of the titanic and he's telling us that if he sails full speed ahead and smashes hard and fast enough into the iceberg it'll be ok. But it won't be ok. This ship will sink, and it will go down with all hands on deck except for Abe, his minions, and his paymasters who will row away to safety.

All I can say now is with the next upcoming election, he needs to be thrown out. The Japanese will only have themselves to blame if they reelect him in. Forget about a viable opposition. Anyone will do. This guy is seriously nuts. Japan WILL collapse if the tax hike goes through. We are already in a recession from the last tax hike. Another hike will put us in a depression. It really will be the end.

Japan needs deflation to bring prices to normal level and we are still not there yet. Not sure why government wants inflation when everyday items are more expensive than most other countries..... People who live here have been getting ripped off for years and when prices start coming down to a reasonable level they want to force inflation back on us here....what a JOKE!!!

Stimulate what?

Government spending.

Insanity: doing the same thing over and over again and expecting different results. - Albert Einstein

WHAT a shocker...(eyes rolling on a sarcastic tone) This comes in an election year..so I'm not surprised in the least that Abe is making a pre-emptive move to put himself in a less-dark light, if that is even possible. He is forever the cunning politian ( and no expert on the economy) .... sigh

Salaries remain the same, no one gets bonuses any more and prices go up.

I wonder why spending is down, Mr Abe?

Duh . . .

Dooby, dooby, dooby, doo! The LDP and Abe do another backpedal because of their failed economic policies! Can they change the record please? I'm really getting sick of the same old song!

So, aside from pursuing personal, nationalist goals against the wishes of the public, and ignoring them altogether when it comes to nuclear ambition, is there ANYTHING that Abe has done for the nation besides further tank the economy?

"...as Prime Minister Shinzo Abe prepares for elections with household spending lower than when he came to office and still falling."

I'm willing to bet that even Abe himself doesn't want to hear about Abenomics and the three arrows (now nine) anymore. He's probably asking that the picture this thread comes with be burned.

The Japanese government has begun informally discussing a second delay to a hike in sales tax, as Prime Minister Shinzo Abe prepares for elections with household spending lower than when he came to office and still falling.

That's because your first tax-hike, implemented on April fool's day, wasn't very well thought out Shin-chan. People don't have enough to spend as it is, partly as a result of the first hike. Fix the economy before increasing taxes

Abe's arrow is limp

Stimulate what?

Mike Wyckoff: "He is forever the cunning politian ( and no expert on the economy) .... sigh"

Actually, he's not cunning at all -- he's vapid and as see through as window before they invented glass. It's just that the Japanese have a memory that is either extremely selective (see any history in which they are the aggressor) or about as long as a mayfly's. Mention last year's trend and their eye-brows go up and they chuckle. Mention Ishikawa Ryo and you get question marks. Mention Nadeshiko Japan and you get a vacant stare. So it's really no surprise when Abe steals your chocolate bar then gives you back a sliver before an election and tells you he's the good guy, and people thank him for it.

IF he's elected again, which he probably will be because, again, selective memory (and right-wingers), he'll immediately begin talking about things he NEVER brought up during the election, including the tax hike, and saying it is 'the will of the people' again. Guaranteed.

Love the use of the term ignite. Like wages will ever ignite.

I just do not understand why they do not admit the simple truth. The population is both ageing and decreasing at the same time. Expecting the economy to expand and to see more spending is ludicrous. They may as well increase the tax now... because they're kidding themselves if they think the economy is about to expand.

No talk of structural reforms, or cutting government expenditure, still.

it would be meaningless to press ahead if it crimped tax revenue by choking the economy

But tax revenues have been boosted by 13 trillion yen, according to the same article, including 8 trillion yen attributed to the sales tax rate increase.

Proponents of delay say the loss of an estimated 5 trillion in revenue from the tax hike would be more than offset by the growth benefits of Abe’s stimulus policies.

And I've got a bridge-to-nowhere to sell ya.

“If the planned sales tax next year dampens the economy again, it could hurt people’s sentiment and strengthen their sense of abandoning hope.”

I already abandoned hope when Abe announced he was going to spend 30,000 yen on millions of pensioners this year.

I would gain hope back if a Japanese government takes serious measures to get its finances into better shape. Until the government does, I have no choice but to save money rather than spend it, and invest overseas, because it's me who is going to have to look after myself. I do not trust this deeply indebted government will be there to support me in the future.

At least Abe could implement structural reforms like he said he would, then I might invest here a little.

consumption tax which is the most unfair tax since it does apply the same to everybody regardless of your income.

Taxes exist to gather a steady source of revenue to fund government expenditures, not to be fair. Tax is but one part of the system. Various jurisdictions around the world have higher rates of consumption tax than Japan, and ensure "fairness" of the overall system by targeting government expenditure appropriately to those in need.

Consumption taxes also provide steadier revenues than income taxes do. Income tax revenues decline during economic downturns, but economic downturns are when spending on the needy is most required.

Cowardly Abe will surely delay the tax rise. For all the guff he spouts about reform, when it comes to making bold decisions he shirks away every time.

I wonder why... lol

Stimulate what?

More like stroke Abe's ego and make him orgasm. There is no other reason.

I'm investing outside Japan now, it's tiring when nothing is working because of their broken system....

Not sure why government wants inflation when everyday items are more expensive than most other countries..... People >>who live here have been getting ripped off for years

You are answering the question, to rip-off people more. And by inflating prices, they are inflating the consumption tax income since it is a percentage on the price, consumption tax which is the most unfair tax since it does apply the same to everybody regardless of your income.

The 2nd rax hike hike to 10% is old news been announced for years already once delayed.

without the tax increase delay how can abe ever stay in power? this and his other recent antics are nothing more than a ploy to avoid getting kicked the hell out of politics entirely.

anyone in their right mind should be able to see by now that nothing he is doing is working economically, and his collaboration with ishihara and hashimoto have turned japan's eastern asian relations into a complete nightmare.

anti-japanese sentiment from china and korea has probably not been as high as it is now in a VERY long time. way to go abe. nice political maneuvering.

I will praise Abe if he can delay the second sales tax hike. It is a hard job to feign to go along with the Finance Ministry and baffle their scheme.

I'm pretty sure I hate Abe as much as the rest of the people on this site, but what can any opposition party do in the coming election? They can't call for the tax increase, that too would be suicide. So even though we all new the tax increase was a mistake, and we also knew that it probably would never happen, Abe comes out as the defender of the little guy by not raising the consumption tax. And the crazy thing is, as Smithinjapan said, because of short term memory, people will laude Abe as being a great thinker!

If anyone wants to understand what is happening in Japanese politics, they might take a look at the British TV show "Yes Minister," and "Yes, Prime Minister." It's on YouTube.

While there are huge differences between British politics and Japanese politics, the way heads of state are controlled is, I'm sure very similar.

"A tax-hike delay, especially with fresh government spending, could inflame concerns about Japan’s national debt...."

Those "concerns" have been around for over a decade, and all the predictions they inspired about skyrocketing int. rates, Japan defaulting, hyperinflation, etc., etc. have proven utterly false.

Its time for whoever has such "concerns" to realize they don't understand how the economy works.

i don't necessarily believe j-consumers are hunkering down right now. the latest sales figures were low because of the unseasonably warm start of winter. hence there was less of a need to buy warmer clothes or heater or blankets, etc. i think consumption will see a slight uptick this year with the deregulation of the electricity market and with the proposed lower fees for monthly keitai bills. and anyone with a variable rate mortgage should see their monthly bill reduced.

"Insanity: doing the same thing over and over again and expecting different results. - Albert Einstein"

Einstein never said that.