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PM contender Suga hints at consumption tax hike

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it was inevitable, covid or not

-8 ( +7 / -15 )

Suganomics...Abenomics in all but name..

Increasing the consumption tax soon after a hike last year ?!

Defies logic.

31 ( +34 / -3 )

The rate here is ridiculously low anyways. Back home it's 20%. I can't imagine raising it to 15% will make the economy any worse than it already is.

-42 ( +4 / -46 )

"thinking ahead, we'll have no choice but to raise the consumption tax by asking the people (to understand) and after undertaking stringent administrative reforms (to cut government spending)."

Why am I skeptical that that second part will ever come to pass, whereas the first part almost certainly will?

32 ( +32 / -0 )

News here tends to be delayed. He said the above yesterday but today he said that it would not happen within ten years at the press conference.

16 ( +17 / -1 )

Un. Believe. Able.

They should abolish it altogether, not ratchet it up once more.

Still following Europe, they won’t stop until it’s over 20%.

14 ( +15 / -1 )

Suga is dead in the water. The tax should be 5% or less. Raise money from the corporations, landowners and death tax. Completely nuts, I already don't buy anything.

27 ( +29 / -2 )

Appearing on a TV program on Thursday night, Suga said that "thinking ahead, we'll have no choice but to raise the consumption tax by asking the people (to understand) and after undertaking stringent administrative reforms (to cut government spending)."

So, increasing the tax burden and shrinking welfare - excellent!

Speaking of benefits, my wife and I shelled out the equivalent of $20,000 bucks for the delivery of our child including ante and post natal care, of course. Do you know what we got in terms of governmental support?

Fanny Adams.

25 ( +25 / -0 )

Suga just killed his popularity across the country, "raise the consumption tax" death in political career. How many years ago did George Bush say "NO NEW TAXES" he was gone the following year. I highly recommend revamping the entire government top DIET as to top heavy or FAT. The cost savings alone will add substantial savings and reduce any proposed consumption tax increases. The people are already taxed enough as it stands that its getting to be worse than the use "surcharge tax" seen in just about everyone's bills, that at times the surcharge taxes are more than the service or final product one is paying for.

9 ( +9 / -0 )

How about cutting your "government allowances" first?

Start by getting rid of at least 25% of those parliament members.

Save more money by getting smaller "official use cars"!

Stop that darned wasteful spending that has been and still is going on!

Tax those who got it, the super-rich, people like Aso, Abe and yourself!

But of course all this won't happen. Robin Hood vice versa:

Take it from the poor and give it to the rich!!

24 ( +25 / -1 )

Go back under your rock.

18 ( +19 / -1 )

LOWER taxes not higher are the way to get the nation going again. It is looking like Suganomics will deviate sharply from the jobs and growth delivering Abenomics. This is a mistake from Suga.

8 ( +9 / -1 )

PM contender Suga hints at consumption tax hike

How about those Kasumigaseki scumbags FIRST take a 15%-20% pay cut BEFORE they raise the income tax on people who are already struggling to make ends meet. Oh, and raise the minimum wage you losers! If we have have to pay out more out of our wallets, let the companies do the same!

There is no bottom to the depth of how low the LDP lizards can sink to. Seriously.

14 ( +15 / -1 )

If they can’t get inflation under way to eat away the debt, then increasing taxes is one way of paying for it. What taxes on whom is the political question that should be debated but as there is no effective opposition there is no incentive to think outside the box or do any different than you have done before, so you will get more of the same whether it works or not.

The best way to raise more taxes is to expand the economy. The best way to expand the economy is to deregulate, reduce taxes and get government and bureaucracy off everyone’s back.

In the past landowners were the wealthy and so targeted for taxation, now it is those who own the digital landscape who are the new “landowners” but governments are barely waking up to the fact and that combined with well funded lobbying if dissuading them from introducing fair taxation so it remains distorted to a few mega corporations advantage.

3 ( +5 / -2 )

Whooooopsy! Must remember not to tell people our plans, why didn't I remember that? I'm wearing pants? Who's pants are they? I don't remember putting on pants? People like me...oh they are photos of ex PMs, ha it's a mirror I get so confused nowadays.

1 ( +3 / -2 )

People haven't digested the previous 2 hikes and they are talking about another tax hike. Spend money like a drunken sailor and ask people for money at each port call

10 ( +11 / -1 )

The best way to expand the economy is to deregulate, reduce taxes and get government and bureaucracy off everyone’s back.

It is not the 1980s any longer. Obama raised taxes and the economy boomed. Trump lowered taxes and we are in a near depression. Abe lowered taxes, no benefit, just more debt piled up. The rich need to be taxed highly so that money circulates in the economy and flows to the people who really spend, the poor and the middle class. More inequality of wealth leads to less economic growth. Only taxes can break this unfortunate aspect of unregulated capitalism.

-4 ( +7 / -11 )

Trump lowered taxes and we are in a near depression.

Come again?! Such a statement shows your ignorance of fiscal and economic data.

-7 ( +8 / -15 )

Thanks for ruining my weekend you TWIT!!!

This is just idiotic thinking, taxes have gone up the entire time I have lived here & the super bloated national & local govts just keep spending & I hate seeing all the waste as local govts rush to blow their ca$h but digging & re-doing stuff that DOESNT need even fixing!!

My gut says Ministries all waste at MINIMUM 20% of what they have, for Finance & Construction that goes WAY WAY HIGHER!! START there CUT ALL Ministries budgets by 20% NOW, they can all easily live with that!!

There are too many prefectures, start MERGING, ditto on local levels, there are so many UNEEDED local govt offices nationwide with overpaid underworked staff, it needs to start to GO!!!

People are way BEYOND maxed out on income, resident, property, car, fuel, business taxes etc etc they cant take any more, but when has the govt cared for Japanese people, I have NEVER seen any evidence they do unless there is a way to tie lots of brown envelopes stuffed with 10ers involved!!

4 ( +7 / -3 )

The rate here is ridiculously low anyways. Back home it's 20%

You poor thing. You'd best vote your politicians out.

9 ( +14 / -5 )

Time to leave Japan. This country has no future.

10 ( +15 / -5 )

My choice koike would not have done this, these old guys are stuck in the past.

Companies should be paying more, look at softwank they got billions to spend everywhere, tax them to the max

12 ( +14 / -2 )

Japan should follow California's lead: raise taxes on capital goods (cars, clothing) but eliminate them for all unprepared food, which is what most lower-income people spend their money on.

21 ( +21 / -0 )

One idiot following another. Consumption is already low because of the pandemic. A consumption tax will only make people spend less.

23 ( +23 / -0 )

He overdosed his sit-ups and Meds yesterday. Rasing tax? City hall will follow. But to be fair politicians will need a pay rise to off set this added cost to their daily life style. They are special, I can survive on cup noodles sure most of us can. My income was reduced under Abenomics it's only fair the architects are rewarded for showing me I can survive hand to mouth, there is a great YouTube video on fire making and grass recipes. Can you use clothing to pay tax?

16 ( +16 / -0 )

I gave Suga the benefit of the doubt until I read this article. Both of the other guys are against raising the consumption tax. Snap election pronto.

9 ( +9 / -0 )

Suga didn’t say anything about raising corporate tax or capital gains tax to maintain Japan’s financial health. Now it’s obvious he will be elected PM to serve the rich and powerful at the expense of the general public.

14 ( +14 / -0 )

It really doesn't matter who occupies the top post so long as the LDP is in power these things will continue unabated in some form or other...they were founded by crooks and know no other way.

12 ( +12 / -0 )

haha...already? Like people aren't still suffering from the COVID19 effects on the economy? Japan can throw out as many GO TO xxxx campaigns but that's not going to be enough. In fact reducing the tax would help the economic recovery. What else is Suga going to do, send out tiny masks like Abe? Kishida or Ishiba would be better.

4 ( +4 / -0 )

How about cutting your "government allowances" first?

Start by getting rid of at least 25% of those parliament members.

Funny thing is cutting 80 Diet Deadwood seats was part of the deal LDP made with DP , the same deal they use as justification for raising the tax...ya know , honorable LDP keeping the promise ..of course the second part of the deal ie cutting the politician numbers went all quiet once Abe replaced the naive twit Noda who agree d to step down as part of the same deal and hold a snap election which he promptly lost . The fact that complicit media here never mentions the " unkept promise" to cut those 80 seats, just shows how deep in LDP pocket they are.

9 ( +9 / -0 )

Crazy, it didn't seem to matter back in 89 when it was just 2%, how long before it's 20%? Why can't governments just be honest, they need to raise taxes, raise income tax, it wouldn't require a whole new dept to administer the consumption tax!

1 ( +2 / -1 )

Suga san hint, will leverage a far larger proportion of income from the most venerable low-income earners/ families.

J consumer tax is a blunt instrument, regressive, unfair, unjust, and a failure to reform and restructure a tax system that Suga San was afforded eight years in government to redress.

I have kicked the furniture, punched/headbutted the pillow.

It Friday Izakaya time, I can huff and puff over a Gin and Tonic.

10 ( +10 / -0 )

If Suga becomes PM will he give up his unneeded extra plane?

Taxing food at more than 10%is is unconscionable and the very idea of doing this shows that Suga shows zero regard for most Japanese people!

10 ( +10 / -0 )

I think it may be time for JT to stop showing pictures of the PM. It is rather hard on the eyes and 15% sales tax will be hard on the wallet.

6 ( +6 / -0 )

Now one in six little kiddies in Osaka live below the poverty line. It’s nice to know we can score one in eight!

3 ( +3 / -0 )

The old LDP bait-and-switch scam of Abenomics will soon be followed by the bait-and-tax encore of Suganomics. The LDP oyajis can't learn new tricks so it's plus ça change for the hard-done-by cash cow Japanese consumers.

3 ( +3 / -0 )

Speechless duh speechless. Instead of lowering a bit he wants to increase. Onigiri size has already been drastically reduced in size compared to last few years. Bento boxes have already implemented fake designs/dents to put less stuffs in it. Drink bottle size has been reduced to 1.6L from 2L. Man everything will be microscopic soon.

7 ( +7 / -0 )

@Crikey,

Hahahahahahahaaaa excellent I am still laughing. Thanks you hit the nail on the head and I got a good laugh out of it.

3 ( +3 / -0 )

Suga, a senile old hack who needs to retire, not assume the office of PM.

4 ( +4 / -0 )

So much for encouraging Economic stimulus.... quite the opposite.

Would be far better to streamline and improve the efficiency the Government when using Tax payers money.

7 ( +7 / -0 )

For anyone considering purchasing a property, 10% tax rate is rather a lot! I'd say load up now with properties before you can no longer afford them, however according to other news stories people are leaving Cities such as Tokyo, moving out looking for more space and working from home... that's further going to depress the housing market in the City.

4 ( +4 / -0 )

Bad idea. Suga is an idiot.

How about he and the entire LDP take a pay cut? Boom, problem solved

11 ( +11 / -0 )

The easiest and safest thing the J-Gov can do when it needs money is raise the consumption tax. However, Japan is facing a serious depopulation problem with its low birthrate and increasing elderly population of pensioners. The government needs to think outside the box. How about increasing immigration? Legalizing and taxing cannabis? If someone has a better idea, please post!

4 ( +4 / -0 )

Give me a break already!!! Shoveling out ¥2.3 trillion(!!!) of the window, out of which shoving ¥75 billion into Dentsu's and other shady enterprises' pockets in a VERY VERY murky scheme and then asking for a tax increase??? Really??? REALLY? Isn't that just a slightly bit brazen???

7 ( +7 / -0 )

The 893 alter ego of our increasingly tone deaf, born to rule Todai educated elites is increasingly coming to the fore and backs bent double under the yoke are soon to be asked to take one more for the team. With another 所場代 (consumption tax) increase on the way, Einstein’s (misattributed?) witticism about insanity, repeating the same mistake, each time expecting a different result, is to be validated yet again.

1 ( +1 / -0 )

I am out of words to describe the incompetence and idiocy of the Japanese bureaucracy at this point.

6 ( +7 / -1 )

Global Comparison of Consumption Tax (VAT) Rates

(as of 2013)

https://www.nippon.com/en/features/h00039/

0 ( +0 / -0 )

Mr. Suga will be putting the final nail in the Economy coffin after COVID - 19 and the 10% increase back in Oct. 2019.

2 ( +2 / -0 )

nanotechnologyToday  08:44 pm JST

Global Comparison of Consumption Tax (VAT) Rates

(as of 2013)

https://www.nippon.com/en/features/h00039/

I would retort with a comparison with Global income, and I personally would suggest a look at minimum wage 40% to 60% of Japan's work force. Globally or at least in the G7,8,9 however many there are now. Japan ranks lowest. So as a living wage the amount of tax is disproportionately high when you consider the disproportionately low income. It's the 2% of high income earners that screw the figures.

5 ( +5 / -0 )

Word to the wise Japanese electorate, you don’t vote for the guy who wants to tax you more. It’s a no brainier.

4 ( +4 / -0 )

Consumption taxes are well known to have a greater impact on lower earners than higher earners. If confirmed, this is a typical move out of the neo-liberal playbook.

6 ( +6 / -0 )

Gotta pay for all of our masks somehow.

3 ( +3 / -0 )

@Nanotechnology

Japan’s consumption tax is now double that of 2013. Australia’s has a 10% Goods and Services Tax, but it was only introduced after extensive canvassing of the viewpoints of multiple stake holders. Not only was there a streamlining of the tax system which resulted in previously higher taxed items becoming cheaper, but most food staples and many other products were completely exempted. Japan’s consumption tax was presented from on high as a fait accompli and with next to no public consultation. It was a highly regressive tax from the get go, in a time when wages have not been going anywhere and with next to no compensatory offsets. Already expensive prices have become progressively more expensive with each jacking up of the rate. Finally, some of those 20% consumption tax countries wage rates are much better than Japan’s, even for part time workers, so even with a 20% tax rate, things are often more affordable than here with its 10% tax, but low wages, and prices that are often double what you would pay elsewhere.

8 ( +8 / -0 )

Nice shot in the foot.

1 ( +1 / -0 )

Those stringent reforms will need to slash about 30% to 40% of expenditure to plug the budget deficit.

those who can ought start saving now if they haven’t already. You’ll be paying higher taxes or for your own services, take your pick.

Hmmm... paying for one’s own services? The user pays, as a general principle? I am crazy, or might this actually be the answer for Japan?

-3 ( +0 / -3 )

Tax , well no need for work.

0 ( +0 / -0 )

Gotta give it to Suga announcing his neo-liberal, regressive bona fides right off the bat. Of course with his LDP anointing in this "democratic" system he has nothing to fear from an electorate.

3 ( +3 / -0 )

The following idea has been around for some time now but with today's technology it is actually possible.

Eliminate personal income tax.

(Any the rich always find ways of avoiding paying)

With the tech available a law requiring all businesses have cash registers ( similar) that are connected directly to the revenue service office. Each individual is issued a photo ID card with IC chip that contains their income status.

This will now making it possible to have a variable sales tax from 0 to whatever the highest income earners would have to pay.

It would making paying taxes far more difficult to avoid.

The concept is simple the rich spend more buy far more expensive things so will end up paying far more taxes.

The government will know exactly and receive sales tax instantly.

This electronic sales tax collection system is not new and is in use in some countries, backed up by undercover inspectors that go around making cash purchases to catch retailers and wholesalers not entering the sale.

Think about it. A lower income person is going to buy a smaller car, house, etc... The rich guy is not going to buy a cheap house or car so he gets hit with high sales tax unavoidable.

Under this system some multi millionaires may find themselves paying more taxes the first year than they have in income tax in their life up to this point.

2 ( +2 / -0 )

Under this system some multi millionaires may find themselves paying more taxes the first year than they have in income tax in their life up to this point.

And the day after any such system was introduced, you’d have a new career path; low-income folk shopping on behalf of high-income folk. On a strictly cash-only basis, of course.

Hmmm... paying for one’s own services? The user pays, as a general principle? I am crazy, or might this actually be the answer for Japan?

By ‘services’ do you by any chance mean stuff like medical services? As in American-style pay through the nose or die medical ‘services’? If that’s what you mean then yes, you’re crazy.

If you mean paying individually for services such as police, firefighting, rubbish collection etc., you’d end up with ‘nice’ affluent areas and lawless, unsanitary, downward-spiraling no-go poor areas.

So yes, crazy.

If what you have in mind is something completely different it would be interesting to hear exactly what you do mean.

Invalid CSRFx2

0 ( +2 / -2 )

Maybe it is much better to lay off 50% of the useless government workers and lower the consumption tax to 5%???

5 ( +5 / -0 )

As many posters mentioned, cut expenses first. Live with what you have, and not tax the poor people even more.

4 ( +4 / -0 )

@cleo

Yes that could happen but why would the rich use some low income person if the purchase is cash no record, they can do that themselves already.

But with major purchases like Cars, homes, etc.. these have to be registered with the government.

Any low income person owning a car or house they clearly cannot afford and are not using or living in will set off alarm bells.

High penalties for retailers, etc...not passing the sales via the special cash register will discourage most.

In Quebec the government implemented a mandatory internet connected register system for eateries because of far to much undeclared sales, if the internet goes down longer than 10 minutes and the establishment doesn't inform the authorities they get a $10,000 fine, if they get caught not entering a sale again massive fines possibly jail. Inspectors go around testing to see if they can make no tax cash purchase without a bill/receipt, Tax revenue suddenly went way up just from that single industry.

2 ( +3 / -1 )

@fxgia

Hmmm... paying for one’s own services? The user pays, as a general principle? I am crazy, or might this actually be the answer for Japan?

Welcome to pre Victorian England.

Workhouses, debtors jails, even private fire departments run by insurance companies.

You can still find the markers on buildings across the UK these marked the building was insured by xyz company so when the fire department from company ABC showed up they do nothing because that wasn't their client, and now you know why so many major fires burnt cities like London,

Similar situations in much of Europ, North America.

As the old saying goes, if you don't learn from history you are bound to repeat it.

Problem with people today is they haven't a clue about the past and why certain things exist today or work as they do today

2 ( +3 / -1 )

They should dissolve parliament on go into a national election.

0 ( +0 / -0 )

I can see the other party now rubbing there hands with joy,

0 ( +0 / -0 )

cut spending? as if

1 ( +1 / -0 )

Then say hello to another recession. What a dumb move. Japan provisions itself in its own currency - it doesn't need to "borrow" from anyone except from itself. Its central bank owns half the national debt anyway, and is fully capable of buying more if it so chooses.

-1 ( +0 / -1 )

In Quebec the government implemented a mandatory internet connected register system for eateries because of far to much undeclared sales, if the internet goes down longer than 10 minutes and the establishment doesn't inform the authorities they get a $10,000 fine, if they get caught not entering a sale again massive fines possibly jail. Inspectors go around testing to see if they can make no tax cash purchase without a bill/receipt, Tax revenue suddenly went way up just from that single industry.

Well done Quebec!! They need to do that in BC where the majority of canadian undeclared sales are.

1 ( +1 / -0 )

I would retort with a comparison with Global income, and I personally would suggest a look at minimum wage 40% to 60% of Japan's work force. Globally or at least in the G7,8,9 however many there are now. Japan ranks lowest. So as a living wage the amount of tax is disproportionately high when you consider the disproportionately low income. It's the 2% of high income earners that screw the figures.

And also importantly Japan has many more taxes\deductions based on ones salary such as resident taxes, high fuel taxes, health insurance(for many it is more like a tax) & there are more, all these other taxes add up to a hell of a lot for families!!!

2 ( +2 / -0 )

He'd better be joking because any sensible economist would know that raising taxes is a great way of stifling growth.

0 ( +0 / -0 )

The concept is simple the rich spend more buy far more expensive things so will end up paying far more taxes.

It already works that way with consumption tax - buy another new Porsche, another new house... pay loads of consumption tax.

By ‘services’ do you by any chance mean stuff like medical services? As in American-style 

I was thinking Singapore-style, in that area.

People who can pay for themselves should, just like they might if there was no government paying for stuff instead of them. They take the responsibility to spend upon themselves.

People who need support to get adequate services, should get support - this is what we pay taxes for - not for the purpose of pampering the well-off (like me). I can pay for myself, so I should, and so should others like me.

Actually, this isn’t so crazy at all!

Japan evidently can’t afford to keep spending willy nilly on absolutely every breathing human body, and spreading that 40 trillion yen of annual budget deficit around the folks who can look after themselves is a realistic approach, that retains support for those who actually need it.

It is crazy to keep Japan’s failing status quo as it is, and face ever rising taxes as a result. It’s either crazy or selfish, if some people have ideas such as putting the cost burden of this crappy system on people besides themselves. No. We pay to support the needy, not the rich. The well-off and rich are adults who can and should be responsible for paying for themselves.

If you mean paying individually for services such as police, firefighting, rubbish collection etc.,

How much of the 40 trillion deficit is due to that do you think? That’s all besides the point, but I’ve no issue with everyone paying a share proportionate to their means for common stuff like police and firefighting. Pretty sure rubbish collection is covered by my local resident taxes.

The problem is the 40 trillion deficit. We need to look at the 100 trillion of expenditure and chop what isn’t necessary.

Instead of spending around 800,000 yen per resident per annum on average we need to get it down to under 500,000.

-2 ( +0 / -2 )

any sensible economist would know that raising taxes is a great way of stifling growth.

The only growth in Japan is in its public debt though.

Thats the problem, and its a 40% chop to expenditure that is required.

-1 ( +1 / -2 )

@fxfai

The problem is the 40 trillion deficit.

Look up Modern Monetary Theory

A good explanation can be found on CBC:

Modern monetary theory is not the future — it's already here: Don Pittis.

2 ( +3 / -1 )

@Suga

When you raise taxes......again. Make sure you take a proper pay raise in the process. I mean what else are these extra tax funds used for anyway? It' wouldn't be right if you didn't personally benefit out of the move.

0 ( +0 / -0 )

Antiquesaving, I’m not a believer in that. I like to say that MMT = Mickey Mouse Theory :)

-3 ( +0 / -3 )

I’m not a believer in that. I like to say that MMT.

It's not a question of being a "believer." MMT offers an explanation of how public finance really works in the real world, while disproving wrong and archaic beliefs, like the belief Japan needs to balance its budget, or else! Or else what? Ummmm....

1 ( +2 / -1 )

why would the rich use some low income person if the purchase is cash no record, they can do that themselves already.

The purchase would go through the normal channels In the name of the low earner, and the high earner would then buy from the low earner in cash, paying more than the price paid but less than what it would have been with the higher rate of tax added.

It already works that way with consumption tax - buy another new Porsche, another new house... pay loads of consumption tax.

Except that the tax on the Porsche is way less as a proportion of income than the proportion the low earner pays just on daily essentials.

People who need support to get adequate services, should get support - this is what we pay taxes for - not for the purpose of pampering the well-off (like me). I can pay for myself, so I should, and so should others like me.

Mmm, no, that isn’t what we pay taxes for. We pay taxes to keep the country/our local community running smoothly.

Who decides who needs support and who doesn’t? What about those who can mostly manage (just) but occasionally need a bit of help?

Progressive taxation means people like you still get to pay for those services, except you pay indirectly through taxes instead of directly through the cash register, while the less well-off get to access the services as a right and not as charity.

Japan evidently can’t afford to keep spending willy nilly on absolutely every breathing human body

Not without sufficient revenues, no. So raise income tax on the better-off. They can afford it.

0 ( +0 / -0 )

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