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Gov't says revenue from 5% consumption tax hike to be used only for social security

32 Comments

The government said Friday that revenue from the proposed hike in the consumption tax from the current 5% to 10% will be used only for social security expenditures.

Deputy Prime Minister Katsuya Okada made the comments after a meeting with four other cabinet ministers, NHK reported. The ministers said that 2.7 trillion yen (1%) should be used to bolster the social welfare system, such as lowering insurance contributions for low-income earners and increasing the number of day-care centers.

They said that 10.8 trillion yen (4%) would be used to stabilize the current social security system, keeping government contributions to pensions at the current 50% and to care for the elderly.

Prime Minister Yoshihiko Noda says Japan urgently needs to reduce its debt burden as the nation ages and its labor force shrinks, putting a greater burden on the social security and tax systems.

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TOKYO — The government said Friday that revenue from the proposed hike in the consumption tax from the current 5% to 10% will be used only for social security expenditures.

No, that's not what I think. First it will go to TEPCO. Anything remaining from that will to the Whaling Industry. This is just my opinion...not fact....YET!!

-3 ( +1 / -4 )

Basically, this means nothing. Do they expect people to believe the government keeps a separate savings account in which they deposit the extra five percent, and that withdrawals will only be made to pay off pensioners? All of the money goes into the same hopper and is doled out as they best see fit. If the consumption tax goes up five percent, but MPs then increase pork barrel spending five percent, how in the world is anything "stabilized", let alone improved?

4 ( +5 / -1 )

J-goverment ought to be lowering taxes right now to encourage more spending instead of attempting to lower the deficit. Unlike many other countries’ debts, 95% of Japan’s debt is owed to its own citizens and not to other countries, which means there is minimal time pressure for Japan to pay the debt off and lower its deficit. Also, Japan is borrowing at a low interest rate, the government can currently borrow from Japanese investors for 30 years at a mere 2% interest rate, which is another reason that paying off the public debt should not be the J-government’s first priority.

0 ( +2 / -2 )

This must be from The Onion.

1 ( +2 / -1 )

They said the same thing when the consumption tax was first introduced, and it's as rubbish now as it was then, total back-to-front thinking. You don't decide you're going to raise taxes and then decide what you're going to spend the money on; you calculate how much money you need for what, then look at ways of procuring it, including raising taxes. Instead of spending money on lowering insurance premiums for low-income earners, how about first making it compulsory for married ladies who can afford to sit at home to pay their fair share of insurance and pension premiums.

2 ( +3 / -1 )

Empty words...no one believes J government promises anymore. Their record speaks for itself. You guys said it - Tepco, amakudari oyajis and their pet projects, wasteful construction, quasi governmental institutions, whalers and other vested interests, etc etc....all will be quietly syphoning funds off before we know it.

0 ( +1 / -1 )

Great news for the elderly who already hold the vast amount of wealth in Japan. Expect young persons to emigrate and/or not have families/kids.

2 ( +3 / -1 )

Amazes me the brazenfaced of this man ! We all know that this extra money will be used to pay the UN, IMF, bonds of the European Central Bank,rice to North Korea, Chinese government bonds, billion dollars currency swaps with south korea, rent-panda,etc,etc,etc......and with "small change" we will do as our comrade naoto kan did,sent money to North Korea by spies infiltrated in japan. Please mr. Franks..... ops okada, kan take your friends, Noda, Hatoyama, Ozawa and open a grocery store.

0 ( +2 / -2 )

Yeah right, from the same government that used money for the 3/11 recovery for whaling.

0 ( +2 / -2 )

And if you believe that I've got a bridge to sell you!

What they'll do, AT BEST, is that they will in fact use the funds from a consumption tax increase towards social security, but then use the funds that would ordinarily be used for social security for personal interests and unnecessary public works projects (as well as bringing in more DIET members and hiring more panels to study this and that -- and for whaling, of course).

-1 ( +2 / -3 )

No increase - An increase will destroy the economy. The big boys and girls in government know how to transfer funds, but the adult taxpayers understand their game. Watch for the excuses why the boys and girls vote for the increase, then vote for anyone else the next time. A government that passes a tax increase NEVER votes to eliminate the tax. They just get used to it, and the people suffer.

1 ( +2 / -1 )

Oh come on, you mean it will be used to pay the semiannual bonuses and retirement pensions of the bureaucrats who administer the system.

0 ( +1 / -1 )

If they put 100% death tax on government bonds that should solve the problem

-1 ( +0 / -1 )

such as lowering insurance contributions for low-income earners and increasing the number of day-care centers

I was going to say there must be some way for the construction-industrial complex to figure their go at the trough, but it looks like they've already solved that problem.

-1 ( +0 / -1 )

Well said Cleo - though I thought they were raising the taxes to help rebuild Tohoku....

By all means, more daycare centers but lower insurance for low income? How about lower for all and get rid of the brides and roads to no where, the needless roadwork... ?

-3 ( +2 / -5 )

I thought they were raising the taxes to help rebuild Tohoku....

Nah, apparently they're killing whales to help build Tohoku.

get rid of the brides

I thought the marriage rate was already way down? (I know, a typo - you really meant get rid of the (free) rides, yes? :-)

-1 ( +2 / -3 )

Yeah, right. Sounds a lot another oft stated promise of not ***ming in someone's mouth. Such statements prove the lack of reliability of most politicians' word. The endless social programs in this (and many other countries) play a very large part in the ridiculous national debts. End the Entitlements, end the robbery of citizens by the government, restore individual liberty. Keep your hand out of my pocket, Mr Governor!!!

0 ( +0 / -0 )

I think tmarie meant 'bridges to nowhere' as in Alaska, but the typo was amusing...

0 ( +0 / -0 )

Someone who could not even keep a single promise as stated in its Manifesto, you think he can keep this promise? A liar always a liar.

0 ( +0 / -0 )

I thought the marriage rate was already way down? (I know, a typo - you really meant get rid of the (free) rides, yes? :-)

Was supposed to be bridges but brides, bribes, free rides... all doing Japan in!

0 ( +2 / -2 )

"Brides to Nowhere"...pure poetry, TMarie!

2 ( +2 / -0 )

This will hopefully be the nail in the coffin for the DPJ. The LDP will come back and rescue Japan. We need lower taxes for the job creators, lower corporate tax, lower inheritance tax and zero capital gains taxes. Shift as much of the tax burden as possible to the middle and lower class, after all they are the ones who need the pensions.

-5 ( +2 / -7 )

It's all LDP Tanigaki's fault. (July 2010, LDP advocated an increase in the consumption tax rate to 10%)

http://www.japan-press.co.jp/modules/news/index.php?id=1432

May 2011, Tanigaki said, "Get rid of PM Kan. Then we will cooperate and talk. Or dissolve the Lower House!!!" LDP submitted a no-confidence motion against PM Kan.

Kan stepped down.

http://www.houseofjapan.com/local/tanigakis-motion-against-kan

November 2011, Tanigaki said during the debate of the party leaders, "Compile bills related to a consumption tax rate hike by the end of this year. Then we will cooperate and talk. Or dissolve the Lower House!!!"

DPJ compiled the bill and decided 10% hike on consumption tax rate.

http://www.yomiuri.co.jp/dy/editorial/T111201005789.htm

January 2011, Tanigaki said, "The bill is not clear enough. State how the consumption tax will be used. Then we will cooperate and talk. Or dissolve the Lower House!!"

DPJ says revenue from 5% consumption tax hike to be used only for social security. (Noda knows it is such a stupid idea, but this is exactly the same way when LDP under Takeshita Noboru first introduced consumption tax in 1989. So then Tanigaki should be quiet and join the talk now.)

January 15, 2011, Tanigaki said, "The DPJ is trying to do things that were not part of its manifesto. We cannot accept being part of a lie. Dissolve the Lower House now!!!"

http://www.yomiuri.co.jp/dy/national/T120114003801.htm

1 ( +1 / -0 )

Noda: "Hear that, elderly? We're going to take all this money from the general public and give it just to you! Now vote for us! (Don't worry; we;ll win if we get your vote. The Japanese population skews older than it ever has. Silver tyranny!"

0 ( +0 / -0 )

Is that 10% across all purchases . Regardless whether purchasing a house of a bag of rice - you stil pay 10% ontop of the original price in tax ?

0 ( +0 / -0 )

I thought the whole point of the increase was to help cover the costs of the Tohoku reconstruction?

0 ( +0 / -0 )

@Fadamor, no. I think budget increase proposals for Tohoku have been agreed and passed. This is for social security and elderly care. Japan is running out of money for national SSI called Nenkin..

The supply (declining birth rate) and demand ( increasing baby boomers entering retirement) are not equilibrium.

0 ( +1 / -1 )

j4p4nFTWJan. 21, 2012 - 08:09PM JST

The LDP will come back and rescue Japan

LOL, you must be in construction industry. You are for aiports to nowhere, and Hakomono with no visitors. What you fail to see is that the LDP borrowed from your future and spent it all. Nothing left for your future.

Over the 5 decades, LDP sucked good juice out of Japan, now you are left with dried bones and skeltons to deal with. Do you know that's why Japan is filled with so called "Neat", "Freeter" and "Otaku" with NO future. . The DPJ inherited all debts from the LDP ruling, and you want them to come back, that's so ignorant and unfortunate.

0 ( +1 / -1 )

LDP accelerates move to increase consumption tax

Tanigaki's motion against Kan

LDP, DPJ should hold consumption tax talks

LDP, New Komeito prepare to dig in

@Blair, I have read all weblinks. Thanks.

Well, The above weblinks convinced me that Tanigaki and the LDP are acting like problem children. They need to set a priority streight. They need to shift the focus on what is the best interest for people of Japan instead of winning a party line politics. It got to stop. The LDP;a pathatic loser, but the biggest losers are Japanese people if you guys are allowing them to behave this way. This is not a time to divide, rather it is a time to unite to achieve the objectives. The public needs to tell them to stop this nonsense; a party of "No" Japanese version.

0 ( +1 / -1 )

The supply (declining birth rate) and demand ( increasing baby boomers entering retirement) are not equilibrium.

Such a shame that they've never really dedicated any time to thinking about how to solve this problem. Equality for women in the workforce would go a long way... Not going to happen anytime soon though I fear.

0 ( +2 / -2 )

How about all of these corrupt politicians for take a 5% discount from the huge salaries that come from OUR TAXES here in Japan??

0 ( +0 / -0 )

U.S. is running into this too. Baby boomers are retiring and the Zero Population Growth "ZPG" movement of the 1970's meant most families from then on limited themselves to one or two kids. Those kids are now in the workforce and having to pay taxes to support the retired baby boomers.

The only silver lining to this problem is if we survive the drain the baby boomers put on the social security "net", when the current workers retire there should be about an equal number of kids who have taken their place in the workforce. I'll bet the ZPG proponents never took the impact on social programs into consideration when they were chastising large families back in the 70's.

0 ( +0 / -0 )

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