politics

Japan faced with gloomy data ahead of tax hike

23 Comments

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The tax hike is part of Abe government's plan, to fund his agenda of building a "strong Japan". The people so far support him. After all who would not want a strong nation. 23% increase in military spending is just a number people don't get a feel of.

Until they realize when they are hit in the pocket books, that is.

Then they will start questioning what this "strong Japan" means and scrutinize what the government has accomplished in that goal.

And then the embarrassment will set in.

3 ( +6 / -3 )

Abe wants to raise taxes for the middle class but lower taxes for corporations. It's absurd. Japan is headed for a crash if this goes through.

6 ( +9 / -3 )

So Abenomics is starting to work. It is just not working the way Abe said it would.

8 ( +9 / -1 )

"After all who would not want a strong nation."

Well, the Canadians, Swiss, Finns, New Zealanders, Austrians, Danes, to name a few, aren't too bothered and generally prefer NOT being almighty superpowers. I guess the Japanese are different.

3 ( +6 / -3 )

This mirage of Abe-nomics will soon reveal itself as nothing more than a trick to get consumers to believe the recession is over. But, consumers already don't have money so the idea is to raise taxes and companies to follow suit and give raises? What about government workers? Will they get raises? Doubt it.

4 ( +4 / -0 )

Please Japan, separate tax for essential goods and luxuries. Don't tax food, that's just ridiculous. Let Luis Vuitton suckers pay for more taxes, but don't burden single mothers or the poorer of us.

11 ( +12 / -1 )

Abe wants to raise taxes for the middle class but lower taxes for corporations. It's absurd. Japan is headed for a crash if this goes through.

Japan's corporate tax rate is among the highest in the world, and is one of the main reasons the bulk of Japanese branded goods are no longer made in Japan. Businesses find it hard to increase wages when many pay more on tax than they do on their payrolls.

As for the middle class tax increase, this was passed by the late DPJ. The World Bank has been putting pressure on Abe and Japan to increase their tax rate to European levels, without taking into account that the things like food and staples are twice as expensive as in Europe, and that Japan's median income is not that high.

Japan is not headed for a crash, the crash is already occurring.

-3 ( +7 / -10 )

sangetu03

Japan's corporate tax rate is among the highest in the world

Nice joke of the day. Big Japanese corporations are greatly favored and pay almost no taxes, while small and middle sized businesses are disadvantaged.

3 ( +7 / -4 )

"Japan's corporate tax rate is among the highest in the world"-it's not truth. but there are other resons for that.

1 ( +2 / -1 )

The consumption tax should be zero for children's clothes and essentials, medicines, food, education materials, and probably 10~15% for everything else - that's how the high taxes in Europe are managed.

4 ( +5 / -1 )

Nice joke of the day. Big Japanese corporations are greatly favored and pay almost no taxes, while small and middle sized businesses are disadvantaged.

Have you got anything to this to be the truth?

-3 ( +2 / -5 )

Yes. Japanese corporations would not have the success that they have today if they were not sponsored by the bureaucrats. Big Japanese corporations can borrow as much money as they want from banks without paying them back. Guess who pays for them? The average citizens through taxes.

What's on the paper and how businesses are actually done is completely different in Japan.

2 ( +6 / -4 )

Again, have you got anything that shows it to be the truth? Just saying it doesn't make it true. It also does not make it false, but I'd like to see something with some facts and figures behind it, rather than just the opinion of some guy on the internet, because if it's true, I'm interested in knowing more.

-1 ( +2 / -3 )

Abenomics is destined to fail and cause lots of hardship, which is a pity because Japanese people deserve something more than the continued economic repression thay have had over tthe last 20 years or so.

2 ( +3 / -1 )

So then it would be nice if that exemption for food and medicine could be allowed. Also if businesses with revenue under 20m yen could be exempt so that they won't be "confused" {what the heck.)

2 ( +2 / -0 )

Unlike previous recoveries in Japan, his policy of much greater monetary easing and bringing inflation into the economy is aimed more at domestic consumption than pushing goods overseas.

This is such backwards thinking. "Good" inflation is the RESULT of domestic consumption. We buy more, so businesses can set higher price points. This is NOT what is happening with Abenomics.

"Bad" inflation is the rise of prices due to things like printing money or, as is happening to us now in Japan, huge fuel and import costs caused by disadvantageous currency rates. This is Abenomics in a nutshell. This inflation just makes things seem expensive to people who still have limited spending money, which makes them spend their money on, say, big bottles of discount sake so they can forget this mess we're in.

I understand this and I don't have an economics degree. How can the PM of one of the biggest world economies not understand it?

4 ( +4 / -0 )

Abe knew what would happen once the tax hike kicked in. How could he not? Just living through the last two changes to the Japanese consumption tax system should make it crystal clear that the Japanese public will choose to severely cut their spending habits or resort to less expensive, generic-brand alternatives rather than waste their precious savings on buying less of what they used to be able to purchase. The irony this time, though, is that it is Abe's very own proudly-trumpeted inflationary policies which will in the end PUNISH his saving supporters by making their assets worth less and less each year they save.

I think such knowing duplicity was a crucial part of Abe's dishonest plan from the start~promise "three arrows" (with the first two being nothing more than a continuation of previous zero-percent interest rates and massive central bank money printing on the one hand, and massive government spending on pork projects for the LDP's big-business supporters on the other) all the while knowing full-well that the vaunted and quite necessary "third arrow" (economic deregulation and increasing business competition) would never even be introduced. It was a sham promise that served its purpose: it got him re-elected even after a dismal first-run record.

The silver lining is that even with all the increased fuel purchases from overseas, the economy is still able to produce a current account surplus, never mind how slim it may be. But the way Abe is shamelessly trumpeting his "accomplishments" to the nation at present is truly hard for me to take, given that both he and I know full well that all his pseudo-accomplishments will vanish once the consumption tax kicks in in April.

(P.S. to the writer of this article, it's not "nay-saying" to state what should be perfectly obvious to everyone by now~and, indeed, has already become apparent to three-quarters of the public still willing to put economic reality before all the self-serving cheer-leading hype constantly spouting from the same, tired, recycled and completely uninspiring political leaders.)

4 ( +5 / -1 )

Go read "the enigma of Japanese power".

0 ( +2 / -2 )

@Sangetsu, Strangerland, et al.

"Again, have you got anything that shows it to be the truth?"

Bloomberg News: "Cutting the corporate tax would have "a very limited effect" as about 70 percent of Japanese companies dont pay the levy, Finance Minister Taro Aso told reporters today in Tokyo."

(I think it's time for some of the most outspoken posters on the JT forum to acquire a new world view that's in line with something I call "the real world.")

http://www.businessweek.com/news/2013-09-12/japan-said-to-consider-corporate-tax-cut-in-stimulus-package

2 ( +2 / -0 )

Shinzo Abe's time for accounting is nigh. Hang him up to dry.

0 ( +0 / -0 )

(I think it's time for some of the most outspoken posters on the JT forum to acquire a new world view that's in line with something I call "the real world.")

Nicely put

0 ( +1 / -1 )

“If Abenomics succeeds, domestic demand-led economic growth will be achieved, making current account deficits a more regular feature of the Japanese economy,” predicted Koya Miyamae, economist with SMBC Nikko Securities."

That's an enormous IF! Much like ; if elephants could fly. With the debasement of the currency, the coming capital controls, and eventual loss of investor confidence, it's all going to blow up in an awful way. Of course, it's the bottom 90% that are going to suffer.

0 ( +1 / -1 )

"it's all going to blow up in an awful way."

When? I'm tired of hearing predictions that never come true from your world view. Give us a time frame and we can hold you to it.

0 ( +0 / -0 )

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