politics

Panel of experts backs sales tax hike coupled with stimulus

29 Comments
By Stanley White

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© (c) Copyright Thomson Reuters 2013.

©2021 GPlusMedia Inc.

29 Comments
Login to comment

So the government's hand-picked "experts" favor upping the consumption tax. But did these "experts" express the voice of the people? For some reason, I doubt it.

Why doesn't the government take 60 people from normal, everyday life and from all over Japan and ask them about the consumption tax hike? I traveled throughout Kyushu and Shikoku several weeks ago and upon asking people here and there what they thought about Abenomics, I didn't hear one speak kindly of it. As for the consumption tax hike, nobody favored that either.

Is the LDP-led government feeding us a con game or what? Are they conning the general public into believing that everybody favors such a move? The above advisory panel stuff leaves a dull feeling in my stomach.

7 ( +9 / -2 )

Sorry but these "experts" are idiots!

The govt MUST cut its federal & local spending by 15% across the board, there is CLEARLY massive waste, tons of corruption, KBs, amakudari. These are the places the govt must cut!

Then & only then can we consider a higher consumption tax, ALONG with NO Tax for food! And get rid or resident taxes, local taxes should be based on property owned or paid via rents etc along with local govts taking a share of locally collected consumption tax.

The tax code is a bloody mess, it can be easily simplified & then we can toss all those bureaucracies made to collect all these taxes when GET THIS we can just pay at the cash register & at the tax office when we do our tax returns(or via employers) gee what an amazing concept

YOUR WELCOME you "experts"!

8 ( +8 / -0 )

The writer doesn't know what he's writing about.

"...if it was coupled with other stimulus."

A tax hike is NOT stimulus. A tax cut, yes, a tax hike is quite the opposite.

6 ( +9 / -3 )

Nice pick up there JeffLee. Right on the button ...

1 ( +3 / -2 )

So, Abe states his economic reforms will increase disposable income for families, yet he intends to increase everything from sales tax to pension payments. How in the heck does this increase disposable income? It is impossible! It means a decrease of disposable income by at least 10%. And, the masses are believing his rhetoric? Yeah, three arrows all right! You know where they are going, don't you?

2 ( +4 / -2 )

It appears that Panel of Experts is working with Abenomics to increase the public debt at fastest possible speed whereas. majority of JT readers have sincerely expressed their concerns to such policies.

0 ( +2 / -2 )

I wonder how many people on this hand-picked panel were your everyday citizens who will suffer from the increase. This coming on the heels of the announcement that the Japanese government is going to spend more than it ever has in history to pay off some of its borrowings. Hmmmm....

-1 ( +4 / -5 )

What is the point in raising the consumption tax and then spending the extra revenue on stimulus? Note that each "expert" is biased and favours stimulus for their particular industry.

If these "experts" think that raising the consumption tax will hurt the economy then they should say so. They should advise a smaller increase, or no increase at all. But for them to say "it's OK to raise the tax as long as my industry gets some extra money" makes a farce of the whole proceedings.

3 ( +4 / -1 )

For the last time, Canada does NOT have a 5% consumption tax. Canada does not have a uniform tax. Each province is different. Alberta 5%, BC 12%, Manitoba 13%, New Brunswick 13%, Newfoundland 13%, Nova Scotia 15%, Ontario 13%, PEI 14%, Quebec 15%, Saskatchewan 10%. The Yukon, NWT and Nunavut are 5% but factor little due to extremely low populations. On another note, why does public works always seem to be the main issues with keeping the economy going? If this is the case, the country is doomed to failure in perpetuity.

3 ( +4 / -1 )

min. 10 % at least or 12 up to 15% would be better, no problem at all.

-5 ( +2 / -7 )

Tax the young people to pay for the old people, a serious mistake from the government, the little man cant afford this! Tepco raised their prices by 10% now the sales tax!

2 ( +3 / -1 )

"we should raise the sales tax as scheduled and consider raising it even further because it is important for fiscal discipline,” - Cutting expenses and waste is even more important and should be done FIRST!

" if it was coupled with other stimulus " - O f course this " other " stimulus" such as equipment investment tax write offs, increase in wasteful public works etc. will only benefit cronies and big companies and do zilch for the average consumer.

" there are tentative signs wages will start rising ". - BS...what signs?. Some of the biggest export companies paid / will pay increased bonus once or twice which will then change as soon as the yen gets stronger again...apart from Lawson and I think one or two other companies which we heard about ad nauseum a couple of months ago, no other firms seem to be increasing salaries...can't see them doing it once the sales tax goes up and consumer demand drops again.

" At 5% Japan and Canada have the lowest sales tax in OECD " - I just love how J govt uses this argument and conveniently doesn't mention that the other countries don't have the myriad of " fees" and taxes we pay in Japan or at least not to the same extent. I,,m talking about eg city/ ward tax, expensive public health insurance, shaken , car acquisition tax, highway toll robbery fees etc, etc,,,, Also in most countries when the sales tax goes up - other taxes are cut to compensate the average Joe, be it the income tax, other kinds of direct sales taxes, insurance premiums,,,etc....Of course there is nothing to compensate the average Taro for the increase here. But hey , this is the LDP that t J- public voted for quite overwhelmingly at the last election so I guess it's time for some " gaman" " shouganai" and a deeper bend over. Abenomics for the masses.

4 ( +4 / -0 )

The tax increase will just be transferred to TEPCO, who will pay subcontractors who will pay sub- subcontractors and the yakuza to find pathetic people who have no other options but to work at Fukushima.

Any remaining money will be used to create medals the emperor can hand out to TEPCO officials for the creative planning that built the economic stimulus Fukushima has brought.

4 ( +4 / -0 )

i don't think the j-government should get any extra money, not with the entrenched elite bureaucrats that are the ones that actually govern japan and only allow changes that keep them safely in place. they would never allow a change in japan that benefits the people if their pure elitist bureaucratic jobs would be at risk. really, to hell with higher taxes for these perverts.

3 ( +3 / -0 )

It will be interesting to see what the pain threshold of young smart educated Japanese is. There is already a steady trickle of bright young people hopping on planes to greener pastures. At what point does it turn into a flood?

Small towns in Japan have learned the hard way that foisting the health care costs of the elderly on young people just encourages the youth to move to away. Build a house in Fukuoka city were health care costs are low and drive to work at the Lexus factory in Miyawaka where the services provided are considerably less for the amount of taxes paid.

Be a bioengineering researcher in Tokyo and get taxed to death or hop on a flight to Vancouver, the second least tax-burdoned city in the world or Singapore where tax revenues compared to GDP are already half of Japan's.

1 ( +2 / -1 )

"Experts" are already in their comfort zones, with cushy retirements and perks in place. They pontificate about the good of the commoner, but they don't - in the scheme of things - have any empathy for the silent lemmings who will be most impacted by tax increases. Policy without accountability is the scourge of modern capitalism. It's time for laymen to head those panels or at least participate on a 50-50 basis. People should not be lost in the shuffle of high-brow policy-making.

3 ( +4 / -1 )

Experts? How about asking the common man? So much of the "recovery" money was wasted, no one seems to care, just throw money here, it is someone else's job to monitor it.

2 ( +2 / -0 )

A consumption tax is a fair type of tax providing all other sales taxes and other strange taxes are removed along with a drop in the income tax. Income tax is theft of a person's labour.

Look at it this way. A person works for a company that produces an article and when sells it, collects consumption tax for the government. The employee who has received wages for producing the article is then robbed of his wages for producing that article that the government collects tax on.

How is it that a small country like New Zealand with its small population can manage ok with it's welfare system, free public hospitals, no additional pension or healthcare payments. An accident compensation scheme funded through employers ensures that everyone has free treatment for accident related injuries.

Their consumption tax across the board is 15 percent but there are no other sales taxes, no taxes on second hand private housing, No death taxes.When the consumption tax ( GST) was implemented, there was a reduction in the income tax rate. The pension system is also built in to the tax system.

The pension system and health payments are just another extra tax grab in Japan, except people no longer can afford to make these payments on top of their normal living expenses. I think Japan wastes too much money- actually we know they do.

Read the post above from Marcelito. I couldn't have said better.

2 ( +3 / -1 )

These so called experts need to go back to school!

2 ( +2 / -0 )

A consumption tax is a fair type of tax

No, it's regressive and wildly unfair: a consumption tax takes proportionately more from the less wealthy. By what twisted logic is it right for the less well-off to pay proportionately more taxes than the more well-off?

1 ( +1 / -0 )

Here's a suggestion for the people; if the tax is raised, minmize all personal spending to bare necessities for one month. Send a message.

0 ( +0 / -0 )

cleoSep. 02, 2013 - 12:35PM JST A consumption tax is a fair type of tax No, it's regressive and wildly unfair: a consumption tax takes proportionately more from the less wealthy. By what twisted logic is it right for the less well-off to pay proportionately more taxes than the more well-off?......................................

The wealthy are always going to be well off no matter what taxes are in place. You would rather see someone who gets 900 yen an hour give a portion of it away to the government ? Taxes should be on spending only. By reducing income tax on lower wages when consumption tax rises, will give people more to spend and more incentive to work .

-1 ( +0 / -1 )

Here's a suggestion for the people; if the tax is raised, minmize all personal spending to bare necessities for one month. Send a message

This doesn't affect the public spending side of the equation, which is the real problem.

I'd happily pay an extra percent in sales tax for each percept of public spending reduction. It's win-win.

0 ( +0 / -0 )

You would rather see someone who gets 900 yen an hour give a portion of it away to the government ?

A person who gets 900 yen an hour pays little to no income tax because of allowances, thresholds, etc. Yet when he goes shopping he pays the exact same cash amount in tax on everything he buys (most of which is basic necessities, all he can afford) as the rich person who notices neither the consumption tax nor the income tax. Lowering income tax for a person who already pays none (or very little) is not much of an incentive to spend, especially if it comes as an extra 5% tax on every purchase. And putting it forward as an incentive to work to someone who is already working round the clock on minimum wage just to stay clothed, fed and sheltered ...? If they can't afford bread, would you suggest they buy cake instead?

0 ( +1 / -1 )

Agree with Cleo.

Right now utilities and food, etc prices are rising but base salaries are not neither are jobs at the low level.

-2 ( +1 / -3 )

the rich person who notices neither the consumption tax nor the income tax

One thing is though, how about the people that pay no income tax but have amassed a tidy sum? Like people now retired who used to get bonuses 25 years ago that look like today's salaries? Taxing consumption is at least fair in that sense, especially as young people today are condemned to deal with the debt problem gifted to them by that generation.

1 ( +1 / -0 )

Uh, Canada does have a consumption tax, it's called GST goods and service tax. It is 5% but each province has its own provincial tax added to it which is why provinces like Nova Scotia where I'm from have a tax of around 15%. Nova Scotia merged the 2 taxes into the HST or harmonized sales tax. It isn't a very good comparison though because I don't think there are added "prefecture" taxes

1 ( +1 / -0 )

how about the people that pay no income tax but have amassed a tidy sum? Like people now retired who used to get bonuses 25 years ago that look like today's salaries?

Presumably they paid income tax on it when they received the income. If they have it amassed in any system that pays dividends/interest, they also pay tax on the income from that. If it's a very tidy sum and they're well advanced in years, it's only a matter of time before it becomes liable for inheritance tax.

The elderly with money in the bank are not known as big spenders; they aren't going to add much to revenue from an increase in consumption tax.

0 ( +1 / -1 )

http://www.bloomberg.com/news/2013-09-03/japan-salaries-extend-longest-fall-since-10-in-threat-to-abe.html

salaries are falling. i don't see how can they say increasing taxes won't affect the economy.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites