politics

Japan closes on elusive tax deal to break policy gridlock

15 Comments

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15 Comments
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Of course nobody touches entitlements and spending. The answer is naturally, more taxes.

3 ( +5 / -2 )

Great...surprise, surprise, the only political deals that the LDP and DPJ ( which Noda practically turned into a mini LDP under his leadership ) ever manage to agree on are the ones that screw the little people. Up goes the tax at a time when J- economy and the average Taro is doing it tougher than ever while the original DPJ promises of administrative reform and cutting the enormous bureaucratic waste including 20% cut in public service costs, amakudari posts and useless semi government institutions full of overpaid pampered useless oyajis , overblown budget requests for everything from white elephant projects to nuclear research funding slowly get watered down to the point where they are now almost completely reversed or abandoned . The distant memory of the first 6 months of DPJ government with the spectacle of Renho & co. grilling the faceless bureaucrats and making efforts to cut expenses and bring accountability to the ministries and departments seems just like a short lived dream. THAT was why DPJ got elected and had a mandate for, NOT to raise taxes ( which they promised not to do in their manifesto ). The Finance ministry puppet Noda has hit the DPJ self destruct button with this and ensured that the party will get decimated at the next poll and split up shortly afterwards. No one will ever believe their promises again... What a dissapointment after such a promising start just 3 short years ago. As always in J- politics the score is establishment 1 , general public 0.

9 ( +9 / -0 )

How about only raising it to 7.5%, and cutting pension benefits from 60000 yen/month to 50000 yen/month (and just 40000yen/month per person for a couple with house). It would get rid of much more debt than stifling spending, since most pension recipients don't need that much to live comfortably

-1 ( +3 / -4 )

Fools, all of them.

3 ( +3 / -0 )

The sales tax increase was agreed upon months ago. The "debate" was just posturing and showmanship to give the illusion of real debate going on.

That way the public is more willing to be suckered into accepting this tax grab.

2 ( +3 / -1 )

vat tax! this across the board tax is so recessive! screw theae rich jerks that thw tax will have no edfect on shameful

5 ( +5 / -0 )

The neo-liberals triumph again. Instead of a steeper progressive tax on income, they choose an across-the-board tax that hurts poor people. At the very least, why not just make a high consumer tax on luxury goods, and leave basic necessities alone? When will this war against the "precaritariat" end?

4 ( +6 / -2 )

The rich get richer the poor get poorer, well get poorer and have to suck it up...after all we all have to share the pain... Except those on above average wages.

3 ( +3 / -0 )

Should read, "Japan closes IN on....", no?

0 ( +0 / -0 )

basroil, that is not a lot of money. Today the kids do not take care of the parents. 60k yen is not a lot of money. However it is more like 170k yen. Still not a lot to show for a lifetime of hard work and paying into the system. So Noda chan is going to hit people with a double perhaps triple hit to their pay. After paying oh what was it last year 17 percent of their income into the retirement.

Higher sales tax and higher retirement premium perhaps 27 percent will not produce a balanced budget. The worse is yet to arrive. People will spend less money and more jobs will be lost so again people spend less money. The vicious cycle of deflation needs to stop. The government has to inflate the yen.

0 ( +1 / -1 )

Most taxpayers in Japan have come to the conclusion that the words "government efficiency" are more inclined to be shocked when they learn that their money is spent prudently. J-goverment is still funding a nonessential program which is costing every Japanese taxpayers alot of money. Many will agree that there are many examples of misplaced spending priorities. This illustrates the problem of J-government with bad management. The government operates on a different standard than private businesses. The reason mismanagement and outright larceny are less common in the private sector is that those businesses that tolerate these practices don't last. The J-Government officials, on the other hand, lack this incentive. When things go wrong, they don't go out of business, they raise taxes. Major issue in Japan is that their citizens do not want to see their tax money wasted. They want to see those money stretched as far as possible.

1 ( +1 / -0 )

The government operates on a different standard than private businesses. The reason mismanagement and outright larceny are less common in the private sector is that those businesses that tolerate these practices don't last.

Quite so. The reason being, I think, that customers can take their custom elsewhere if they don't like the goods and services that a private business provides. Taxpayers cannot - they are stuck with the overpaid incompetents that in all probability only a minority of the total population voted into power.

0 ( +1 / -1 )

It is about time the government of Japan moved on this.

Most countries have a dedicated tax system, using VAT or, in the United States, a payroll tax that works like a VAT---to fund general retirement pensions. This is not a matter of the Japanese being "overtaxed", it is one of finally paying the kind of taxes that the rest of the developed world pays, to fund a program that is expected among the generations now.

-1 ( +0 / -1 )

Ah Japanese pay more for "pension plan" than the Americans with social security and medicare. Fredrick the Japanese pay a lot in taxes. Seems to be a tax on everything! Lets see there is an income tax from 15 to 50 percent based on the total taxable income. Then there is the pension plan which needs 40 years of earnings vs America's 10. Starts at a flat rate of 13.3k yen a month plus 8.675% from employer and employee. A more honest figure is 17.35% since it is a cost of hiring an employee. Add another 4% for health insurance. Then add in vehicle taxes, consumption tax and liquor taxes. So 40 % taxes is not enough? That is the low end with the high end at 60, 70 or 80 percent? Now you want to add a VAT of 20 percent as well? unbelievable!

0 ( +1 / -1 )

JapanGal, VAT taxes affect businesses much more than individuals, and in a country where most items are imported at one place or another, it is ineffective. VAT is a logistical nightmare and due to poor implementation (due to large overhead), ends up taxing much more, and a 5% VAT can end up being a 15% or higher tax. Lets not forget that Japan is a country of a million forms and hand stamps, more paperwork just isn't going to work.

YuriOtani, 170k/month is absolutely criminal for a social security plan. 170k/month will let you rent a reasonable apartment within the greater Tokyo area and still eat out every single meal. For a couple, you can add an overseas trip every year. That level of pension payment for people that already own an apartment or house is even worse and does absolutely nothing increase the debt and stagnate the economy.

Debt reduction needs to start by cutting spending on non-growth areas (pensions mainly, but also farm subsidies and rebuilding of decaying towns as well), then they can consider higher taxes once other options have been exhausted. They should have learned from Europe that high taxes and high welfare (lets exclude education up to secondary, and health from that, as it helps even out economic mobility) will lead to both economic collapse and widespread political upheaval in even minor economic downturns.

0 ( +0 / -0 )

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