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quote of the day

Unless strong economic growth can push up corporate and income tax revenues, further consumption tax hikes can't be ruled out. It is a matter of timing.


Yasunari Ueno, chief market economist at Muzho Securities Co.

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Follow the money. The elderly and corporations hold the vast majority of private wealth in this country, and the elderly are probably the largest shareholders. Japan is shooting itself in the foot by overtaxing young and productive workers.

3 ( +3 / -0 )

Slumping economies are not fixed by raising taxes

Japan can't grow its economy, and the solution is tax hikes that further depress the economy?

The context here is clearly about fixing the massive public debt problem, not about boosting lousy economic growth. Boosting economic growth would help, but it simply is nowhere near enough to fill the deficit and start paying down the accumulated debt.

-5 ( +0 / -5 )

How about cutting down on government waste?

Alas, government waste probably doesn’t account for anywhere enough excess spending.

The realistic way to eliminate the need for tax hikes is to slash government spending from 100 trillion to 60 trillion.

So then, which 40 trillion do we cut?

2 ( +3 / -1 )

"Chief market economist", a.k.a. "detached from reality".

5 ( +5 / -0 )

Jefflee you nailed it.

1 ( +2 / -1 )

Why not raise corporate tax and raise tax on high earners instead of trying to get the poor to subsidize the rich through consumption taxes.

2 ( +5 / -3 )

How does one get a title like "chief market economist" when spouting utter ignorance? Japan can't grow its economy, and the solution is tax hikes that further depress the economy?

Economies grow because people have more capital to invest, because they start and grown businesses, innovate, and build. Taxes and regulations generally have a dampening effect on growth.

Japan hasn't got any good solution for its overspending and massive debt. Cutting spending would be sensible, but Japan's government has made too many promises and has too many obligations to do that. Printing money can't be done fast enough to cover the debt and continued deficit spending without causing hyperinflation. Debt forgiveness? It's what needs to happen, but it won't. Banks would never allow it.

So, instead, let's just follow the Laffer Curve to its farthest point, raising taxes bit by bit, and seeing tax revenues sag back to even levels. The government and banks are supposed to exist to support the national economy and to provide an infrastructure in which people can generate economic growth. Ueno's mindset is the opposite. He seems to think that the people exist to provide revenues to the government and banks. His approach is not capitalism. It's not even feudalism. Piracy is the better description.

4 ( +5 / -1 )

Slumping economies are not fixed by raising taxes. But who am I saying this not being a chief market economist.

3 ( +5 / -2 )

Bertie has it but Abe doesn't like you I would think.

1 ( +1 / -0 )

How about cutting down on government waste? No bonuses. No cherry blossom tea parties, in fact, no money for "entertainment." So much money is wasted.

7 ( +7 / -0 )

And then those higher taxes on consumption would put a drag on...well...consumption, which is the biggest driver of that economic growth we would need. Doh!

6 ( +7 / -1 )

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