15% Consumption Tax Hike 'Unavoidable'

[Taro Toporific]

Consumption Tax Hike 'Unavoidable' for Japan's Next Leader, Finance Minister SaysSunday October 23, 4:28 am ET, TOKYO (AP) --A consumption tax hike will be unavoidable for Japan's next leader because the country needs to cover its portion of ballooning pension pay outs, the finance minister said Sunday.
Prime Minister Junichiro Koizumi has said he won't raise the consumption tax from the current 5 percent while in office. His term as head of the ruling Liberal Democratic Party ends in September 2006...
....With more than a third of the population expected to be 65 years or older by 2050, the government has been trying to ease fears about the system's solvency. Pension pay outs currently total 2.7 trillion yen ($23.5 billion) annually.

[Taro Toporific]

Japan's ruling party mulls raising sales tax - report
10.23.2005, 11:18 PMm FORBES.com
TOKYO (AFX) -A panel of Japan's ruling Liberal Democratic Party is considering raising sales tax to 10-15 pct from the current 5 pct to help rebuild Japan's ailing social security system....
The report followed a comment by Finance Minister Sadakazu Tanigaki, who said Sunday that an increase in sales tax was 'unavoidable' as the country seeks to claw back its heavy debt....
The panel's interim report is expected to present three possible scenarios, envisaging sales tax rates of 10, 12 and 15 pct.

[Marked Trail]

:domo: :domo:

Gov't planning 2,100 yen as annual environmental tax per household
japantoday > business
Tuesday, October 25, 2005 at 16:21 JST
TOKYO--- The Environment Ministry proposed Tuesday that an environmental tax of 2,400 yen per ton of carbon be levied on energy consumption in Japan from 2007, forcing each household to pay an average
2,100 yen annually.
http://www.japantoday.com/e/?content=news&cat=9&id=353135

[cstaylor]

Here's an idea:

- Diet members (cabinet members excluded) must find their own way to work. No free cars, no free trains.

- Salary reduced to kacho level for non-cabinet members.

- Diet members must pay nen-kin

Is this a response to Koizumi's pushing for a breakup of Japan Post, 'cause there's a lot of money there that could be tapped to cover pension costs?

[FG Lurker]

The pension system is a pyramid scheme that will collapse sooner or later. They can either tax the economy into oblivion trying to prop it up, or dismantle it now and deal with the fallout.

Politicians being what they are they will of course try to prop it up as long as possible, hoping to push the political nightmare of dismantling it onto someone else.

[IkemenTommy]

Here's an idea:

- Diet members (cabinet members excluded) must find their own way to work. No free cars, no free trains.

- Salary reduced to kacho level for non-cabinet members.

- Diet members must pay nen-kin

Is this a response to Koizumi's pushing for a breakup of Japan Post, 'cause there's a lot of money there that could be tapped to cover pension costs?

werd

[emperor]

I'm going to NY in March & might buy a macbook and a couple of iPods while I'm there (even though it might be cheaper for me to just pay a J-friend to buy in Tokyo and mail to me in Eire with the Yen as cheap as it is) - does anyone know if i can reclaim the sales tax when I'm heading home via JFK or can I avoid paying the tax in the first place?

Ive been trying the UK embassy IRS line but its only open for 3 hours from 9-12am and all the US-IRS numbers are automated and crap.

[Kuang_Grade]

Well, each state has their own little tax quirks and I don't live in NY state, but my suspicion is no. You can generally only avoid state taxes in the state if you are registered in the state as a reseller (ie, you are buying inventory to resell) or as tax exempt organization (like a church or school). It may seem unfair to tourists, but the state tax authorities would say the sales tax is paying for the cops, the road systems, health inspectors, ect that allowed you to 'safely' visit and buy stuff in the first place...and its true for everyone...people from New Jersey have to pay NY sales taxes if they are in NY and buying something.

US folks can avoid them via buying stuff online and having them shipped to them...if the company does not have 'nexus' in the state (a retail outlet, a warehouse, ect) in most cases people won't be charged sales tax in either the state of origin nor the destination state, although state laws in the destination state likely require people to report these transactions and pay sales tax, although since the state doesn't know anything about the transaction, it is kind of hard to enforce. But some retailers of high ticket items charge local sales tax even if they don't have a presence because they made an agreement with the state to do so (I think Dell works this way). Given that that states have wildly divergent sales taxes (zero in some, 7 or a high 8 % in some others), the rise of online sales have been an issue of considerable contention for some state tax authorities...

If you got a friend you can trust and you'll be around for more than a few days, you could give that person money to buy stuff online from someplace like maccconnetion.com or amazon and have it shipped to them to avoid local sales tax.

Calling the IRS line won't help because if you actually got to talk to someone, they would say, "we only deal with federal taxes, you need to talk to the state tax authorities"

[emperor]

well.. I'll be staying with friends who live in NY, so maybe I should buy using my credit card from Amazon or MacConnection and have it shipped to their house? will i be able to claim the rebate too? (most rebate fine print says that its restricted to US only, but I take it you dont have to be a citizen?)

[Kuang_Grade]

You could try but the odds are pretty good that the retailer and/or credit card company will flip out and block the sale since super expensive stuff is being bought outside your home country and being shipped to an address not on file with them (ie, it will look like your card was stolen). The rebates would take a while to be mailed back (usually a month or two) and then you would be stuck with having to cash a US check in US dollars somewhere else, would probably eat 1/3 of the rebate in bank fees right there....and almost certainly the rebate checks would need to be delivered to a US address. You would better off having your friend do the buying and give them the rebates as a spiff for the service...The credit card info will match the shipping address and if things go wrong and they don't get delivered in time, then it would be much easier for them to deal with returning them than you.

This page has apple's approved internet resellers in the US...
http://wheretobuy.apple.com/Catalog.html
Some have slightly better deals than others but some also make you work more for it via multiple rebates and the such.

[Catoneinutica]

The MOF and LDP, via the ever-compliant J-media, have done such an effective job of marrying the need for consumption tax increases to the increasing "pension" and "social welfare" costs resulting from Japan's low birth rate that even some FGs seem to be drinking the Koolaid. Come on, the bulk of the J-tax-yen goes to financing concrete pouring by the various -kumi and -gumi tribes in Japan ("The construction industry hasn't been invaded by yakuza; civilians have invaded the construction industry."). Nothing in the current or proposed budgets suggests any real throttling-back of the "construction state" mentality that prevails in Japan.

And even if consumption tax revenue were dedicated to non-infrastructure-related budgetary needs, tax money is, well, fungible; more tax money from other sources would simply be freed up.

The MOF wants to maintain the pretense of increasing consumption taxes to Sweden-like levels under the pretense of financing a Sweden-like welfare state. In reality, it's just trying to grease the wheels of the post-war infrastructure-and-export paradigm that has served it so well. Beggar the J-consumer to subsidise the big boys.

Here's an idea:

- Diet members (cabinet members excluded) must find their own way to work. No free cars, no free trains.

- Salary reduced to kacho level for non-cabinet members.

- Diet members must pay nen-kin

Is this a response to Koizumi's pushing for a breakup of Japan Post, 'cause there's a lot of money there that could be tapped to cover pension costs?

[Catoneinutica]

I'm bumping this baby to emphasize a fundamental reality that seems to have gotten lost in the matrix world of Japan: Contrary to what the oyaji tell you, taxes don't need to be raised because Japan's baby-making machines are, uh, sleeping on the job.

It's because worker productivity is so abysmally low here. One productive worker could easily do the job of ten road-construction-site loiterers.

But to increase productivity would require economic liberalization and the creation of something along the lines of Anglo-American capitol markets, and that would erode the centralized power of the MOF, the institution at which every kyoku mama in Japan hopes her precious little Hiroyuki will work after graduating from Todai.

-catone
-wondering if those kyoku-mama-giving-their-sons-blowjobs stories are true

[Uhhuh35]

"...But to increase productivity would require economic liberalization and the creation of something along the lines of Anglo-American capitol markets, and that would erode the centralized power of the MOF, the institution at which every kyoku mama in Japan hopes her precious little Hiroyuki will work after graduating from Todai...

Hey man, you're gonna' have to stop confusing the issue with facts! If Japan's leaders say taxes need to be raised, then they need to be raised. They graduated from Todai not you! You know what happens to the person who "makes himself noticed" don't you?