A Nation Of Hope And Higher Consumption Tax

[Mulboyne]

[floatr][/floatr]Asahi: Keidanren to propose 2-percent hike in consumption tax rate, corporate tax breaks
Nippon Keidanren (Japan Business Federation), the nation's largest business group, will propose a higher consumption tax rate--and a drastic corporate tax cut--to create "a country of hope," sources said Monday. The group's proposals, which also push constitutional revisions, patriotism and administrative restructuring, will be officially released on New Year's Day. The report, tentatively titled "Japan, a country of hope," reflects the ideas of Nippon Keidanren under the leadership of Canon Inc. Chairman Fujio Mitarai, who took over as the federation's chairman in May this year. The report, in fact, has been nicknamed the "Mitarai vision." Many of Mitarai's suggestions reflect Prime Minister Shinzo Abe's policies of creating a "beautiful country." But the draft report also shows that the business circle intends to increase its influence on government policies, the sources said...more...

See also here and here.

[dimwit]

Keidanren loves to propose this every new administration or so. For those of you who haven't been here long, the last time they raised the consumption tax in the mid 90's it resulted in a two year recession and near toppling of the Hashimoto administration. No politician will risk that kind of political suicide as visible tax will piss the LDP's greatest supporters as well as activate opposition in the normally apathetic youth vote.

[maninjapan]

By no means am I a business graduate but even I can clearly see the knock on effect this would have.

A 2% hike doesn't seem much, but it would be enough to piss people off from buying stuff and then reducing coporate tax would really kick people in the mouth.

Why not concentrate first on the prefectures embezzling funds from various departments, get rid of the excess baggage and hanger ons that exist in Japan and then move onto improving the economy.

Once it has improved, then consider raising interest rates, slowly slowly, then if ths situation continues to improve and there are still signs of consumer confidence then MAYBE just MAYBE raise V.A.T.

If raising it by 1% causes probelsm, then consider reducing it again! But please Japan, don't be stupid and try to run before you can walk, hell, even crawl. You maye have the world's number three GDP but doesn't mean that you're ready to step it up!

[Mulboyne]

Bloomberg: Tanigaki Says Sales Tax Increase Unavoidable, However Unpopular

Former Finance Minister Sadakazu Tanigaki said Japan will have to raise its sales tax, even though Prime Minister Shinzo Abe has avoided the issue ahead of national elections this month. "A consumption tax hike is unavoidable," Tanigaki, 62, said in a July 13 interview. Abe, whose Liberal Democratic Party is likely to lose seats in the July 29 parliamentary upper house election, said this month that raising the sales tax could harm the economy while also refusing to rule out such a move. "He isn't saying he won't raise taxes," Tanigaki said in the interview. Tanigaki, who served for three years as finance minister under Junichiro Koizumi, Abe's predecessor, lost a bid last year to lead the LDP by advocating the national sales tax be doubled to 10 percent... In the interview, Tanigaki took issue with Abe's contention that economic growth may generate enough revenue to balance the budget by 2011. "I also think we should try to increase tax revenue by spurring growth," said Tanigaki. "But as a fiscal management issue, we also need to look beyond 2011. The view is too focused on short-term issues." Asked if he still thinks the sales tax should be increased to 10 percent, Tanigaki said, "The number may change slightly, but that's the basic direction"...Tanigaki declined to say whether he would run to replace Abe as LDP head should the prime minister step down...more...

[Buraku]

All parties must present consumption tax plans
http://www.yomiuri.co.jp/dy/editorial/20071124TDY04306.htm

Add to the long list of J-taxes

hoteru tax for gaijins,
mass transit tax,
medicare tax
cigarette tax,
road tax,
beer tax,
liquor tax,
property tax,
Bicycle tax
bridge tax,
school tax,
sales taxauto tax,
a capital gains tax,
sponge tax
electricity tax,
coal tax
gas tax,
oil tax,
water tax,
car rental tax,
pigovian tax or sin tax
cell phone tax
telephone tax,
valued tax,
earthquake zone tax
urban environmental tetrapod tax
gomi day tax
city income tax,
national franchise tax,
pension tax,
death tax
and higher sales taxes

LDP have already decided that they will tax us all to death, period

[canman]

Have the same taxes if not more. So it's not like Japan has added a ton of new taxes. I got an email showing the taxes that the average Canadian paid in his or her lifetime and the list was amazing, wish I could locate that.

[Greji]

Have the same taxes if not more. So it's not like Japan has added a ton of new taxes. I got an email showing the taxes that the average Canadian paid in his or her lifetime and the list was amazing, wish I could locate that.

Sounds like the Dems in the states. Do away with the tax cuts of Bush and crowd and raise taxes.

[FG Lurker]

Sounds like the Dems in the states. Do away with the tax cuts of Bush and crowd and raise taxes.

You forgot something -- the multi-trillion dollar increase in US Gov't debt during the Bush administration. Tax cuts are great, but basic fiscal common sense says that if you take in less money you have to spend less too.

I would be happy (overjoyed in fact!) to see Japan spend FAR less instead of raising taxes.

[dimwit]

The LDP will consider all sorts of tax increases but the local chapters in Farmville will scream back at them that they are political suicide and debate will end there. I think that a number of of LDP are secretly hoping that the DJP win the next election, impliments tax increases, and get turfed in the election after that by a unhappy electorate.

[ttjereth]

Have the same taxes if not more. So it's not like Japan has added a ton of new taxes. I got an email showing the taxes that the average Canadian paid in his or her lifetime and the list was amazing, wish I could locate that.

Which has absolutely nothing to do with people living in Japan and paying taxes here. Just because our home countries have shit taxes doesn't mean we have no right to complain about them here.

Doesn't matter if you take it up the ass in the western world or in Japan, you've still allowed to moan a little.

[Mulboyne]

Yomiuri: Fukuda - Consumption tax rise within 2 to 3 yrs

Prime Minister Yasuo Fukuda said Monday he is thinking about raising the consumption tax rate sometime during the next two to three years. Speaking at a press conference at the Prime Minister's Office, Fukuda said, "I'm looking at [a rise in the consumption tax rate] from a long-term perspective of two or three years," thus indicating it would be difficult to adopt the raise from fiscal 2009 as part of this year's tax reform. During an interview with news agencies from Group of Eight countries last Tuesday, Fukuda said now was a crucial time to make decisions vis-a-vis a rise in the tax. "This is the direction we're heading in," Fukuda said, hinting at the inevitability of hiking the consumption tax rate in the near future. However, Fukuda made clear he would look at the issue holistically, while taking into account ongoing debate on the issue at the National Commission on Social Security, as well as government offices' "zero waste" approach to expenditure. The prime minster also said he would monitor trends within the business cycle. "It all takes time," he said. As the set of laws related to reforming the pension system stipulate an increase in government spending to shoulder the basic pension by fiscal 2009, Fukuda's remarks may affect debate within the government and ruling parties on tax reform, which is set to move into top gear at some point later this year. Meanwhile, Fukuda flatly denied the possibility of reshuffling the Cabinet after the Group of Eight summit in Toyakocho, Hokkaido, to be held early July. Some ruling Liberal Democratic Party members have indicated their desire for a post-G-8 summit shake-up. "It's still a blank slate. Current Cabinet ministers are doing very well and thus I'm not in a situation to answer [questions on the timing of a possible reshuffle]," Fukuda said.

[Mulboyne]

Kyodo: Keidanren calls for raising consumption tax to 10%

The Japan Business Federation will call for increasing the consumption tax rate by 5 percentage points to 10 percent by fiscal 2011 and urge the state to fund all budget outlays for the state-run basic pension plan with tax revenues, the group's draft policy recommendation showed Saturday. The federation, better known as Nippon Keidanren, will also ask the government to implement income tax cuts worth about 2.5 trillion yen over a period of few years to cushion the negative effects for low-income and middle-income households from the proposed sales tax hike, the draft recommendation said. The nation's most influential business lobby will announce the recommendations after the launch of a new Cabinet, following the Sept. 22 Liberal Democratic Party presidential election to choose the successor to outgoing Prime Minister Yasuo Fukuda.

Despite the request for a consumption tax rate hike, Nippon Keidanren wants the government to maintain the 5 percent tax rate for food and other daily necessities to minimize the fiscal damage to households. Because of the slowdown in the Japanese economy, the lobby wants the government to raise the tax in fiscal 2010 or 2011, rather than in fiscal 2009, which will begin in April 2009, the draft showed. Nippon Keidanren Chairman Fujio Mitarai had said the consumption tax rate should be raised to 10 percent by fiscal 2014. But the lobby has decided to push forward the proposed tax increase to meet the government's goal of achieving a primary balance budget surplus in fiscal 2011, while funding snowballing social security outlays sparked by the rapid aging of the population.

A primary balance surplus will be realized when outlays other than debt-servicing costs are covered by revenues without relying on fresh debt issuance. Social security costs are expected to grow sharply in the coming years, partly due to the scheduled increase in state burden in the basic pension plan from the current one-third to 50 percent in fiscal 2009. Under the current system, the government annually sets aside 7.4 trillion yen to fund one-third of annual outlays, with the remainder financed by pension premiums collected from taxpayers. According to the draft, Nippon Keidanren will ask the government to extend large-scale tax breaks for child-rearing households in fiscal 2009, as part of efforts to reverse the declining birthrate. The lobby will not propose the introduction of an environmental tax to fight global warming because it doubts the effectiveness of such a measure, the draft said.

[Taro Toporific]

Kyodo: Keidanren calls for raising consumption tax to 10%
...Despite the request for a consumption tax rate hike, Nippon Keidanren wants the government to maintain the 5 percent tax rate for food and other daily necessities to minimize the fiscal damage to households...

I suppose my reaction will be like most Japanese folks.. Saaaa, shoga-nei ...I could live with the 5% for food/energy/rent and 10% for the rest.
Tightening my belt like a good Japanese person, my expenditures "for the rest" taxed at 10% would drop to next to nothing helping the collapse of the Japanese economy.

(Lucky for me, much of my spending of clothing, electrical, and other goods are purchases made outside of Japan.)