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Japan eyes higher corporate, tobacco taxes to fund defense spending

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I'm all for higher tobacco taxes, but not to waste on US weapons at the bequest of the US. Childcare, services for the old....

19 ( +37 / -18 )

...and don't let the companies that operate (read offshore their manufacturing) in countries that threaten Japan off the take either, make them pay 100% tax so they can legally repatriate their money then give them tax credit of 70%.

Lookin at you Nidec, Toyota, Uniqlo.

16 ( +22 / -6 )

But aren't smoking rates falling? To get any meaningful revenue, fhey will have to encourage and promote smoking again, and allow 18 year adults to smoke.

Meanwhile, in other countries they raise taxes on tabaco to encourage people to do give up soming.

Seems some of these policy makers are indeed still stuck in the 70s/ 80s.

22 ( +29 / -7 )

A man smokes in front of a cigarette vending machine in Tokyo

Wearing the Balenciaga black mask like Kanye in his interview?

It is also weighing a plan to tap revenue from a special tax measure to fund the reconstruction of the quake-hit Tohoku region, people with knowledge of the matter have said.

I thought that was the purpose of the last rise in sales tax? How quickly they think the public forget.

taking steps to soften the impact on small and midsize companies, the sources said.

Wasn't that the purpose of the last huge budget with stimulus subsidies for these firms?

The LDP gerontocrats think the public who suffer from their policies are as forgetful as those that benefit from them.

9 ( +22 / -13 )

For individuals, the government has a temporary 2.1 percent special reconstruction income tax until 2037 to aid reconstruction in the disaster-hit Tohoku region in the northeast. It is now weighing the possibility of extending the time limit and diverting part of that revenue to defense spending, according to the sources.

There is no such thing as a "temporary" tax here. Once the government gets it's hands on people's money, they have spent it even before it's actually in their hands.

They will find a way to make it permanent.

15 ( +27 / -12 )

Funding a killing machine with a killing device

20 ( +26 / -6 )

Technically we only need to buy one bomb.

-7 ( +8 / -15 )

Corporate tax can’t be a stable source of funding as companies running deficit are exempt from paying it. With fewer and fewer people smoking, the cigarette tax wouldn’t be either. Just issue government bonds to pay for the defense budget increase. It’s that simple.

-6 ( +1 / -7 )

Tax:

cigarettes

alcohol

luxury goods

capital gains

rich people

large corporations

profit-making temples and shrines

pachinko earnings

a temporary 2.1 percent special reconstruction income tax until 2037 to aid reconstruction in the disaster-hit Tohoku region

How many decades does it take to reconstruct Tohoku?

Absurd.

17 ( +23 / -6 )

Indeed, taxes on tobacco could be increased significantly. In France, the price of a pack of cigarettes is JPY 1,500 compared to JPY 500 in Japan. But this is not a stable source of funding because the number of people smoking is decreasing.

20 ( +23 / -3 )

This fixation on China might be making Xi blush.

The military build-up will only work if the salaries of soldiers, marines and sailors is increased and they get training which will help them post military careers. I get the impression from what little detail we know about the plan that it is more focused on purchasing new systems.

5 ( +8 / -3 )

I’d doesn’t help that the government famously owns a third of the shares of Japan Tobacco.

10 ( +17 / -7 )

pachinko earnings

Only said by someone who doesnt know that they are already taxed! FYI, if you want to change that tax you also realize then you have to allow people to right off their losses as well!

profit-making temples and shrines

You miss the point, they should be removing the tax benefits these and other religious cults get already.

8 ( +13 / -5 )

At least the air will become cleaner…

8 ( +11 / -3 )

The military build-up will only work if the salaries of soldiers, marines and sailors is increased and they get training which will help them post military careers.

One there are no Marines in the JSDF, and they are all "government employees" and if they stay in, they get a healthy pension and benefits.

6 ( +7 / -1 )

I see a Go To Tobacco campaign coming soon! Like the last push to get people drinking more...smh.

Corporate tax is already very high here.

U.S war machine will be happy.

While the workers get poorer the arms manufacturers get mega rich on us!

-4 ( +9 / -13 )

A pack of 30 cigarettes should cost ¥3000 - as it does in some other developed nations.

More tax revenue and will help keep cigarettes out of the hands of young people. Win-Win.

6 ( +12 / -6 )

Tax religion properly and efficiently like other sectors. Want more money in Japan? Become a priest and get away with all sorts.

15 ( +18 / -3 )

Today the very best news from Japan Today! Smoking should banned inJapan. Addicted smokers should all be sent to live in an uninhabited island. Far away from Japan.

-6 ( +10 / -16 )

I see a Go To Tobacco campaign coming soon!

lols! Hopefully the savings of a good defense outweigh the costs of fighting cancer.

1 ( +5 / -4 )

I'm all for higher tobacco taxes, but not to waste on US weapons at the bequest of the US. Childcare, services for the old....

As a tobacco consumer, I think your comment is so right !!..

Taxes for the people, not for US weapons !!..

-6 ( +4 / -10 )

Today the very best news from Japan Today! Smoking should banned inJapan. Addicted smokers should all be sent to live in an uninhabited island. Far away from Japan.

You have to learn to mature and be able to live with those who are different from you..

We can all live together...

Live and let live..

-5 ( +8 / -13 )

That maybe necessary burden should be packed fairly and in percentages equally onto all shoulders, not by this planned and obviously discriminatory measure, totally biased especially against business owners and tobacco smokers. Or do I then get as a thank you an extra private machine gun and a personal missile launcher when I pay in relation more than almost everyone else?

-5 ( +2 / -7 )

I don't want the Tohoku reconstruction taxes going to military spending.

17 ( +19 / -2 )

Very anti-tobacco and govt shareholdings. But, the only reason japanese men get out of bed to go to work in the morning is to get their coffee and tobacco fix. If the tax is up, no money for the kids trip to Disneyland.

corparate tax is a scam. The big companies will order government ministers to use taxpayers money to help them keep in profit for the sake of the economy.

-9 ( +6 / -15 )

Only said by someone who doesnt know that they are already taxed! 

When you win at pachinko, your earnings are not taxed. The parlors are taxed (of course), not the players.

12 ( +13 / -1 )

Great idea. Now, Japan can afford to make purchase of 100% American made munitions and possibly at a 10% discount with a coupon if Kashida san has one readily available.

0 ( +5 / -5 )

Wirh the way things are going on this country, many people will probably take up smoking, just because of the constant stress they are under due to government ineptitude. And I may join them.

By design?

7 ( +10 / -3 )

Japan eyes higher corporate, tobacco taxes to fund defense spending

Good! Tabacco should be taxed much more. And seeing how corporations have been raking in the cash while not providing sufficient pay increases to their workers I say go ahead and spike their taxes. No problem. Also, how about pulling Sapporo out of the Olympics? There's A TON of money that can be saved by just doing that.

-2 ( +10 / -12 )

Good! taxe tabacco as much as possible and do not buy US weapon.

3 ( +6 / -3 )

When you win at pachinko, your earnings are not taxed. The parlors are taxed (of course), not the players.

Never played have you? Tax is paid when make the "exchange" or when you put in the money to play.

Pachinko and slots have tax taken out.

1 ( +4 / -3 )

As an ex-smoker, I am okay with taxing tobacco more. But I feel the money gained should be related to health care as that is what tobacco effects. A country's defense spending should not be funded by smokers, especially as the number of smokers are dwindling. If we are going to go this route, then it would should be taxing alcohol more as well. An unpopular opinion I'm sure. But this would provide a more stable yearly revenue.

2 ( +6 / -4 )

The tax money should go on health.

6 ( +6 / -0 )

Japan eyes higher corporate, tobacco taxes to fund defense spending

I hope the west is taking notes. This is how you do it. If you want something, you have to pay for it.

-8 ( +4 / -12 )

I am only a small company but I already pay over 60% in total taxes to the Japanese govt. If my taxes are raised even 1% more I am out of here.

8 ( +10 / -2 )

Tobacco and corporations will then increase prices to consumers, who in the end are the ones paying for defense profits.

4 ( +5 / -1 )

Cigarettes should be taxed as much as possible,until they are willing to quit

5 ( +7 / -2 )

Tax tabacco and all of its disgusting forms with the highest tax you can conjure. 1000% 5000% the higher the better. Just having a sense of that horrible nearby me makes me sick.

3 ( +10 / -7 )

YES! If you MUST raise taxes to fund a fragile ego and call it defense (to get world recognition as an arms dealer), do it with tobacco and alcohol taxes. Japan may have raised the cost of cigarettes about 250 yen from the time I arrived, but they are still pitifully cheap among developed nations, no doubt because JT says "No" when the government talks about raising costs. Put a pack of cigarettes (ALL brands, even those cheap ones people have switched to when decrying a ¥20 yen increase) to ¥1500 per pack, to start. It is a win for everyone, whether they like and understand it or not -- they will either spend more to get the same, giving us more taxes, or they will quit, saving us taxes on health care.

-1 ( +4 / -5 )

Put a pack of cigarettes (ALL brands, even those cheap ones people have switched to when decrying a ¥20 yen increase) to ¥1500 per pack, to start. It is a win for everyone, whether they like and understand it or not -- they will either spend more to get the same, giving us more taxes, or they will quit, saving us taxes on health care.

There is a method to the madness in gradually raising taxes on tobacco here. If there were a sudden ¥1,000 increase in prices, the sales would drop like a bomb, and tobacco companies would be out of business, well not JT.

By gradually increasing the taxes, people will continue to smoke.

-3 ( +3 / -6 )

I hope this discourages those from buying cigarettes, especially if they know they are funding this agenda by doing so. Finally, I can enjoy clean air whilst enjoying my food at a izakaya!

6 ( +8 / -2 )

JGOV cant afford a significant tax on cigarettes, they own 30% of Japan Tabacco.

2 ( +3 / -1 )

The government has a temporary 2.1 percent special reconstruction income tax until 2037 to aid reconstruction in the disaster-hit Tohoku region in the northeast. It is now weighing the possibility of extending the time limit and diverting part of that revenue.

Let's rephrase that.

The government has recognized the opportunity of imposing a 2.1 percent "special reconstruction income tax until 2037" under the pretence of aiding reconstruction in the disaster-hit Tohoku region. This has never been, and will never be spent for anything other than pork-barrel projects and lavish bribes to corrupt officials.

https://www.asahi.com/ajw/articles/13581931

https://www.bbc.com/news/av/world-asia-20150778

https://www.thedailybeast.com/cheats/2012/10/31/japan-tsunami-funds-misspent

https://apnews.com/article/2020-tokyo-olympics-games-total-cost-8ec49ea2ea9d7316f37ffd20770a2742

It is now predictably extending the time limit for as long as the electorate are prepared to pretend that everything is fine and continue to live in penury by re-electing their feudal LDP overlords.

6 ( +8 / -2 )

Great news on cigs, can we have a tax on big noisy sports cars next?

-1 ( +3 / -4 )

I'm all for higher tobacco taxes, but not to waste on US weapons at the bequest of the US. Childcare, services for the old....

Then you will be happy to know that by far most of the money will be spent in Japan on Japanese manufactured weapons. Jobs for Japanese people in high tech industries. That is good for Japan.

0 ( +4 / -4 )

The government is considering raising corporate and tobacco taxes in stages from fiscal 2024 or later to cover part of the substantial increase in defense spending.

tobacco tax, well I am not sure how much more the government can wrong out of that. Hike the rates, people will smoke less, reducing the number of smokers. Are smokers the ones to fund the national defense? Seems a daft idea to me. Tobacco tax is a sin tax, the idea is to use those to change behavior, not to try to fund your defense by them.

corporate tax, well gee guess who pays the corporate taxes. The employees, customers, and shareholders of those corporations. E.g., Japanese people. This is a better idea than tobacco tax, but still a bad idea, because Japan’s corporate tax rate is already high relative to peers. Hiking the rate will have bad economic consequences.

A better option would to be slash existing spending in half, and enact pro-growth free market reforms that put people in charge of their own affairs. Japan’s existing tax revenues are 65 trillion yen per year. Slash spending to 55 trillion, spend an extra 5 trillion on defense, and the remaining 5 trillion can go to paying down the debt, alleviating the burden on children of the future.

Maybe then the birth rate might stop decreasing even, who knows.

The plan, however, has prompted a backlash from ruling lawmakers and some Cabinet ministers, in a rare display of disunity.

Great. Bad plans should be panned and canned.

With Japan's fiscal health in dire straits, Kishida has ruled out new government bonds as an option

Got to give him +1 for that. Still early days though.

and also targeting income taxes that would directly hit households.

But going with corporate tax rate hikes that will indirectly hit them instead.

-2 for that.

Under one government plan to boost tax revenue, 700 to 800 billion yen would be secured through higher corporate taxes

Hike the rate and overall tax revenues will probably go down as people get hit indirectly by it, and need to cut back on consumption and through poorer wages.

You can’t just dream that you can fiddle with the corporate rate and come up with 700 billion more. There will be knock-on effects from any rate hike, and they won’t be positive.

-1 ( +2 / -3 )

Smockers will be paying for missiles, I love it. Good time for everyone to stop smocking and vaping!!! It's not that hard, one doesn't need something to suck on ALL the time!

-2 ( +3 / -5 )

@ Eastman

So you would be happy to leave difference of a country to US and the next president that might say they are not willing to put American lives at risk for another country? Self reliance is most important!

0 ( +2 / -2 )

Start taxing church and cults and you'll get the money you need (want).

7 ( +8 / -1 )

Those packs are cheap compared to USA. Almost wish i never quit just so i can smoke up at such a bargain price.

0 ( +0 / -0 )

If they're gonna fund defense, taxing the tobacco industry is an excellent way to do it! Increased defense, less smoking, yes please!

-3 ( +0 / -3 )

I hope the west is taking notes. This is how you do it. If you want something, you have to pay for it.

Obviously you know NOTHING about the west. Tabacco taxes in the west are FAR higher than in Japan. Its actually JAPAN that is taking notes and learning from the west.

But that's nothing new, is it?

-2 ( +6 / -8 )

I hope the west is taking notes. This is how you do it. If you want something, you have to pay for it.

Japan should take notes from Canada, and legalize cannabis. Use the tax on the herb of peace to fund the weapons of war.

1 ( +8 / -7 )

Higher Taxes on Tobacco would be a good move - particularly since Smoking inevitably leads to more of a drain upon Hospital resources.

4 ( +6 / -2 )

The money wont all go overseas, some companies such as Mitsubishi Heavy are involved in Defense, what others do you think may benefit ?

2 ( +2 / -0 )

Smoking inevitably leads to more of a drain upon Hospital resources.

It actually doesn't, when you look at the bigger picture, because smokers die younger and don't incur the same end-of-life care costs as healthy people.

-1 ( +7 / -8 )

Simple solutions:

Make each cigarette pack: 5000 yen. Take whatever tax you want from it.

Kyabakura: 20000 yen entry fee. Take whatever tax you want from it.

Old Man Business Suits from wherever they buy them from: 30K- 100K yen per.

Take whatever tax you want from it.

Old Man Onsen: 30K yen. Take whatever tax you want from it.

Basically wherever LDP cronies and executives go to kick back on the company/tax dollar. Tax the hell out of those areas (they are gonna waste that money regardless) and put the money back into society.

I guess in the end it won't really matter though. As Kishida, Aso and the boys will find a way to smuggle the money into their pockets anyways..................

3 ( +5 / -2 )

Why don't they tax face cream and pachinko while they're at it

3 ( +4 / -1 )

Unfortunately Japanese law requires that the government owns at least 30% of Japan tobacco inc so yes they are pushing smoking

Actually the laws is 1/3, and the government sold off a billion of it's shares in JT to help fund the reconstruction after Tohoku. That 3% is major!

And JT or the government is hardly "pushing" smoking. It is a well known fact that JT has been expanding into food production and the food industry as well, expanding their business outside of tobacco.

-1 ( +1 / -2 )

Tax on smokers: good.

Double taxation for US protection: not good.

Japan pays US to defend Japan, so Japan can focus on non-military efforts. So why do we have to pay US again for building up a native military using US weapons?

Also, starving the population to build up the military sounds very much like... North Korea!

-11 ( +4 / -15 )

Fredrik- EXCELLENT POST!

-12 ( +1 / -13 )

The never-ending irony of wearing a face mask (for health reasons), then smoking.

-1 ( +4 / -5 )

Remove the vending machines.

Tohoku reconstruction was about ¥32 trillion ($295 billion), not including the nuclear disaster site. About ¥12 trillion ($82 billion) so far on that.

That means more than half of the government’s total estimated cost of ¥21.5 trillion, including compensation payments and reactor decommissioning expenses, has been used in the 11 years since the meltdowns occurred.

Alarm bells are sounding over signs the heavily damaged structure of the Fukushima No. 1 nuclear power plant may be too flimsy to withstand another major earthquake.

1 ( +2 / -1 )

StrangerlandToday  12:56 pm JST

Smoking inevitably leads to more of a drain upon Hospital resources.

It actually doesn't, when you look at the bigger picture, because smokers die younger and don't incur the same end-of-life care costs as healthy people.

Actually there have been a number of academic studies that refute this idea which basically falls into the "urban myth" realm.

In addition many smokers require ongoing high levels of care for years. They don't all just pass away peacefully in their sleep in their 60s.

@Yubaru

And JT or the government is hardly "pushing" smoking. It is a well known fact that JT has been expanding into food production and the food industry as well, expanding their business outside of tobacco.

Yes - using the fortunes gained by selling ill health and early death. Similarly the mafia using it's gains to move into legit businesses to put a positive spin on it all.

The tobacco industry should be taxed to high hell and the monies used for education, health and welfare.

If the Govt wants to expand it's military might how about taxing more heavily the mega-industrial complex, esp those who will benefit from weapon production.

3 ( +5 / -2 )

If you want spend more funds on the military and thereby increase the production of domestic military equipment or any equipment needed for defense purposes, it is understandable to some extent.

But if you burden the citizens with more taxes, and the equipment supplier from a foreign country gets the money, it's downright silly.

2 ( +3 / -1 )

I thought this story was about defense spending and taxes ? Yet somehow some of you have spun this into an anti American story .!. The very freedoms most or all of you enjoy are compliments of the USA saving/defending whatever country you come from .!. And what country would any of you propose Japan buy hardware and technology from ?

2 ( +3 / -1 )

How about a tax on prostitution? One of Japan's biggest industries.

4 ( +4 / -0 )

Oh well it will only cost more to purchase cigarettes, as I have said before these corporations will not lose they will only absorb the tax increase and pass the cost on to those puffers!!!

The government is considering raising corporate and tobacco taxes in stages from fiscal 2024 or later to cover part of the substantial increase in defense spending.

0 ( +0 / -0 )

LOL the people here are so misinformed. What make you think Japan is going to tax you to buy US weapons? Japan has their on military complex where companies such as Mitsubishi also develop weapons. If Japan build and develop weapons in the country perhaps the taxation would create more jobs in the defense sector in Japan. No where in this article or other articles have I read that JAPAN WOULD BE TAXING its citizens to purchase US weapons. Now here have I read that US has asked Japan to purchase weapons. Japan has its own military and they project the weapons that they need to fight wars, if they don't have it within the look to the outside for a reliable source. I recall the Japanese asking to get the US advance F-22 fighter the US said no!!! The US didn't go to Japan and say hey buy our weapons. I am in the meeting I see the Japanese and other countries coming here with their request for proposals we either make and agreement or tell them to go pound sand in a good way. So stop thinking the US is forcing Japan to buy our weapons, no one is holding a gun to Japan head but NK, China and Russia so go figure use the best or get laid to rest!!!

-2 ( +0 / -2 )

Actually there have been a number of academic studies that refute this idea which basically falls into the "urban myth" realm.

Urban myths don't come with studies from the New England Journal of Medicine:

https://pubmed.ncbi.nlm.nih.gov/9321534/

Results: Health care costs for smokers at a given age are as much as 40 percent higher than those for nonsmokers, but in a population in which no one smoked the costs would be 7 percent higher among men and 4 percent higher among women than the costs in the current mixed population of smokers and nonsmokers. If all smokers quit, health care costs would be lower at first, but after 15 years they would become higher than at present. In the long term, complete smoking cessation would produce a net increase in health care costs, but it could still be seen as economically favorable under reasonable assumptions of discount rate and evaluation period.

Conclusions: If people stopped smoking, there would be a savings in health care costs, but only in the short term. Eventually, smoking cessation would lead to increased health care costs.

https://www.cbc.ca/news/science/smokers-the-obese-cheaper-to-treat-than-healthy-long-living-people-study-1.764092

The researchers found that from age 20 to 56, obese people racked up the most expensive health costs. But because both the smokers and the obese people died sooner than the healthy group, it cost less to treat them in the long run. On average, healthy people lived 84 years.Feb 5, 2008

https://www.nejm.org/doi/full/10.1056/nejm199710093371506

-1 ( +0 / -1 )

The Japanese people's money goes to the government that nuked Japan

Which goes to pay for the defense of the country that cowardly attacked Pearl Harbor.

None of which matters anything today. Time to grow up and get with the times.

1 ( +3 / -2 )

So from the japanese governments point of view....smoking is a good thing.

0 ( +1 / -1 )

Strangerland - thanks for the reply.

But that doesn't actually address what I implied.

Lifetime ongoing costs of smokers is considerably higher in not only the imposition on the health care system, but in other realities such as work productivity, lower level sicknesses and the effect of smoking on families and children health. Just a few examples. Then there's the social impact of having a loved one being infirmed or die prematurely. What is the cost / burden of such? So much more to weigh up than simply "saving on hospital bed costs by dying younger".

And accumulated data often reflects costs in a particular zone eg the US., which may or may not be precise in relation to other countries.

-1 ( +0 / -1 )

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