Taxmageddon

[yanpa]

Japan retail sales fall after tax increase

Retail sales in Japan fell 4.4% in April, compared with the same period last year, as the effect of an increase in the country's sales tax began to be felt.

Japan raised the tax from 5% to 8% on 1 April - the first hike in 17 years.

The country faces rising social welfare costs due to an ageing population and is trying to rein in public debt.

Analysts said sales had dropped in part due to consumers rushing to make purchases ahead of the tax rise.

That trend was evident in March, when sales surged 11% - the fastest pace of growth since March 1997.

...more...

[wagyl]

As is usual in most financial reporting, everyone is taking the short term view.

How often do we see headlines "shares plummet 6%" only to read that they are now valued at what they were four weeks ago?

Anyone who bought them five weeks ago is still ahead.

Sales fell 4.4 % year on year!!!!!!!!eleven!

The previous month, sales "surged" 11% year on year: this is just a time shift in purchasing.

I did it.

You did it.

Everyone did it.

One sentence per paragraph certainly is annoying.

[Coligny]

You are totally right, a price increase never led to lower consumer spending for non essentials items...
And it's totally the same thing as stock market fluctuations and shareholders speculation...

[kurogane]

As is usual in most financial reporting, everyone is taking the short term view. .

Well said. I find most financial reporting to be shokingly advertorial in nature. The Economist is often at least palatable, and their ideological fixations so visible it's actually refreshing, even if I think they are FOS. I don't buy and trade shares much at all, but this idea of constantly trading for micro-profits strikes me as almost a sort of gambling addiction thing. My stock jockey friends constantly tease me because I didn't sell my Apple shares when they got near $800 per whenever it was. Pointing out that I bought them in March 2006 doesn't seem to persuade them at all.

Isn't it Warren Buffett that suggests buying and holding as a more competent strategy? I find him a touch tiresome at times, but it's hard to argue with that level of success.

[matsuki]

The previous month, sales "surged" 11% year on year: this is just a time shift in purchasing.

LOL, even the Japanese aren't out with the "deeply regrettable" and "unforeseeable" on this. How did that shit even get published?

[Russell]

As is usual in most financial reporting, everyone is taking the short term view. .

Well said. I find most financial reporting to be shokingly advertorial in nature. The Economist is often at least palatable, and their ideological fixations so visible it's actually refreshing, even if I think they are FOS. I don't buy and trade shares much at all, but this idea of constantly trading for micro-profits strikes me as almost a sort of gambling addiction thing. My stock jockey friends constantly tease me because I didn't sell my Apple shares when they got near $800 per whenever it was. Pointing out that I bought them in March 2006 doesn't seem to persuade them at all.

Isn't it Warren Buffett that suggests buying and holding as a more competent strategy? I find him a touch tiresome at times, but it's hard to argue with that level of success.

Yep, that is Warren Buffett.

He does not buy and hold everything, but he has the basic attitude that when you buy stocks, you buy a business. Which makes sense in a way. The recent trend in flash trading is getting ridiculous. I read somewhere that it is considered more and more unfair since the guys with the fastest computers and fastest connections get to make profits at the expense of regular customers.

The success of Buffett is not what it once was, since it is much harder to allocate billions of dollars without distorting the market than millions of dollars. He does have decent returns, though, but nothing spectacular in recent years.

[Coligny]

Was at Tokyu Hands yesterday...

They put the price as

1234 ¥ + 税

Without displaying the final price anywhere...

Wasn't there a law few years back making the display of the full price mandatory ?

(Tokyu Hands is a retail place in Japan where they give you stuff in exchange of muneys)
(Just in case)

[wagyl]

There was such a law, yes. I have not researched the change, but I did notice that with the change to 8% tax, many retailers started displaying price before tax. It is no more than a guess but I would think that, since it is so widespread but not at all universal, the law was once again changed to allow prices to be displayed before tax as an option, to show customers whether base price was changed as well as tax rate, and will continue at least until the change to 10% consumption tax in October next year for the same reasons.

I am still stubbornly refusing to buy from the specialist bread shop which changed its price from, for example, 100 yen after tax when the rate was 5%, to 100 yen before tax when the rate changed to 8%.

[Samurai_Jerk]

Lucky streak

THE fatal flaw in Abenomics was supposed to be the raising in April of Japan’s hated consumption tax from 5% to 8%. Just as Shinzo Abe, the prime minister, was coaxing the economy back to health with a fat dose of quantitative easing and fiscal stimulus, the tax hike threatened to send the patient tottering feebly back to bed. Politicians are still haunted by the nausea-inducing plunge in the economy that followed the last hike in the tax in 1997. Yet the alternative—reneging on a previous government’s pledge to go ahead with the rise—could have destroyed confidence in Japan’s ability to cope with its monstrous burden of public debt.

The early signs are that a preternaturally lucky Mr Abe has got away with it.

[Samurai_Jerk]

The End of `Made in Japan'?

Historical comparisons can admittedly be facile. But given the bleak turn Japanese economic data has taken, I can’t help but be reminded of the downturn in 1997, the last time Tokyo raised sales taxes.

A huge drop in machinery orders -- the biggest on record -- is yet another reminder Japanese executives remain reluctant to invest their massive cash reserves or raise wages. Even more ominously, M2 money supply growth is now in negative territory. Such measures should be surging 14 months after the Bank of Japan unleashed history's biggest monetary bonanza. Instead the tepid 3 percent rise in M2 last month put Japan's money supply in the red in real terms, a clear sign BOJ Governor Haruhiko Kuroda's bond-buying spree has lost potency.

"The reality is this: so far, the spending retrenchment in April-May tracks fairly closely the retrenchment seen in 1997," says Richard Katz, publisher of the New York-based Oriental Economist Report.

[matsuki]

But all the yen in the world won't restore Japan to vibrancy unless executives and workers believe that this time, things really are different. That requires Abe to stop the cheerleading and do his part to deregulate the economy. Only by moving decisively to lower trade tariffs, loosen labor markets, encourage innovation, diversify corporate boardrooms and empower women can Abe generate true confidence. Otherwise, Abenomics will remembered more for squandering opportunities than creating them.But all the yen in the world won't restore Japan to vibrancy unless executives and workers believe that this time, things really are different. That requires Abe to stop the cheerleading and do his part to deregulate the economy. Only by moving decisively to lower trade tariffs, loosen labor markets, encourage innovation, diversify corporate boardrooms and empower women can Abe generate true confidence. Otherwise, Abenomics will remembered more for squandering opportunities than creating them.

That's like asking a meth addict to suddenly replace meth with coffee, get a job, and make a plan for the future....sure, it would be great if it happened but.. "We Japanese...."

[Coligny]

I'd say more replace meth with krokodil...

Reagan is dead, deregulation and the 'magic of the market' are so passe...

[IparryU]

I'd say more replace meth with krokodil...

Reagan is dead, deregulation and the 'magic of the market' are so passe...

But he was one of the greatest Republicans you imbecile! How could you say such an ignorant thing you French commi!

Of course it will work!

...

[Grumpy Gramps]

Wifey complained about the price of a tank of gas today. And I said "thank you Mr. Abe". And she goes; "no no no no, it's the Chinese, the Iranians, the Middle East and ... and... and....". I think, she forgot to mention the Pygmys NHK has totally done its job on her. So I guess, bottom up or grassroots is as little to expect as top down.

[Coligny]

She missed blaming... "the DJ00ZES"... Damn, dem japanese knows nothing aboot the true evil in diss world...

At least she came up with an answer... Everytime we pass a gas... station... We end up like 2 confused idiots without anything to really blame... (with diesel at 140y/l I don't want to know the price of regular or premium...)

/double point if she blame the "dj00zes of wallstreet"

[Grumpy Gramps]

Let's wait for winter, when kerosene will probably cost more than vodka. Then we can at least blame the Russians

[matsuki]

Wifey complained about the price of a tank of gas today. And I said "thank you Mr. Abe". And she goes; "no no no no, it's the Chinese, the Iranians, the Middle East and ... and... and....". I think, she forgot to mention the Pygmys NHK has totally done its job on her. So I guess, bottom up or grassroots is as little to expect as top down.

What is the average price of reg. per liter BEFORE tax?

with diesel at 140y/l

Slowly leaning to wanting a D:5 after the bubaruuu loses it's job. Can that fucker tow?

[Coligny]

Seeing some weird pricing these days, often coke bottle (1.5l) in the 120 yens range tax included, in ten years here, never seen it below 150... Usually 158 being the "OMG MUST STOCK UP" price...

Milk seems also to be back on the pre tax hike price range...

[yanpa]

Seeing some weird pricing these days, often coke bottle (1.5l) in the 120 yens range tax included, in ten years here, never seen it below 150... Usually 158 being the "OMG MUST STOCK UP" price...

Milk seems also to be back on the pre tax hike price range...

It's Abe's anti-deflationary policies at work.

Oddly enough I was musing to myself in the local supermarket about what the cumulative effects of the price rise would be on an item I buy there a few times a week, and having forked out the correct change for the new fiddly price, was wrong-footed by it having suddenly been reduced to slightly below the old price.

[Taro Toporific]

Japan’s economy suffers biggest decline since 2011 as tax hike bites
REUTERS (Japan Times) Aug. 13, 2014
The Japanese economy suffered its biggest contraction since the March 2011 earthquake in the second quarter of this year as the hike in sales tax to 8 from 5 percent took a heavy toll on household spending, stoking fears...The world’s third-largest economy shrank an annualized 6.8 percent in the second quarter of 2014...more...

emperor-abe-has-no-dick.jpg

[Russell]

[Samurai_Jerk]

No Sign of Next Generation of Investors in Japan as Tax Incentives Are Ignored

History is working against Japan's government as it seeks to convince a new generation of investors that equities are the best bet for funding retirement.

A program of tax breaks that started Jan. 1 hasn't proved to be the answer, with less than 9 percent of investments coming from people under 40. Now policy makers are looking to tweak the plan. The Financial Services Agency will this week recommend increasing the annual amount that can be invested through a Nippon Individual Savings Account, according to a person familiar with the matter.

[Coligny]

No link whatsoever with the fact that maybe people under 40 are a bit flat broke...

[Samurai_Jerk]

No link whatsoever with the fact that maybe people under 40 are a bit flat broke...

Facts like that would ruin the narrative.

[inflames]

Marketing for NISA plans has been absolutely terrible... I'm surprised anyone even bothered to read them.

Based on the marketing (which banks undoubtedly spent a ton of money) I would have no idea what NISA is, nor how it could benefit me. In fact, I'd probably assume some Japanese woman couldn't quite say 兄さん so came out with niisa.

[IparryU]

They are planning to increase the annual premium amounts and the maximum amount you can have in the plan... as it is now, it is only fit for a uni kid to start learning how to save at most...

fund selection is quite shitty too... a whole bunch of Japanese equities and J-REITs, a few other equities funds are available, but slim to none just about.

[Samurai_Jerk]

Damned if he do, damned if he don't?

Japan's Abe to delay sales tax hike until 2019: government source

Japanese Prime Minister Shinzo Abe plans to delay an increase in sales tax by two and a half years, a government official said on Sunday, as the economy sputters and Abe prepares for a national election.

Abe told Finance Minister Taro Aso and the secretary general of his ruling Liberal Democratic Party, Sadakazu Tanigaki, on Saturday of his plan to propose delaying the tax hike for a second time, until October 2019, said the official, who was briefed on the meeting.

The prime minister, who has promised to announce steps on Tuesday to spur economic growth and promote structural reform, is also expected to order an extra budget to fund stimulus measures, just two months into the fiscal year and on the heels of a supplementary budget to pay for recovery from recent earthquakes in southern Japan.

After chairing a summit of Group of Seven leaders on Friday, Abe said Japan would mobilize "all policy tools" - including the possibility of delaying the tax hike - to avoid what he called an economic crisis on the scale of the global financial crisis that followed the 2008 Lehman Brothers bankruptcy.

Mizuho Chief Warns of Japan Downgrade if Abe Delays Tax Increase

The chief of Mizuho Financial Group Inc. said Japan risks a credit-rating downgrade if Prime Minister Shinzo Abe delays a scheduled sales-tax increase without explaining how the government plans to cut its deficit.

Yasuhiro Sato, president of Japan’s second-largest bank by assets, said Mr. Abe’s framing of such a decision would determine whether it sparked concerns about the government’s credibility regarding its plans for fiscal consolidation.

“The worst scenario is [the government] will just announce a delay in the tax increase. That could send a message that Abenomics has failed or Japan is heading for a fiscal danger zone and then it will harm Japanese government bonds’ credit ratings,” Mr. Sato said in an interview, referring to the prime minister’s growth program.

Mr. Abe acknowledged for the first time Friday that he was considering delaying an increase in the sales tax to 10% from 8% scheduled to take effect in April next year. He said he would decide before an upper house election to be held in July, but Japanese media have reported that a decision could come this week.

Mr. Abe has delayed the tax increase once, after the rise to 8% in April 2014 derailed an economic recovery. Consumer spending has yet to fully rebound, and some economists say the prospect of another tax increase next year is already weighing on spending.

Mr. Sato acknowledged that raising the tax again would pose a risk to Japan’s economy.

“There will be a risk in either case of raising the tax or not, so as long as the government demonstrates a clear road map for fiscal reconstruction, Japanese credibility likely won’t be hurt so much,” he said.

[inflames]

Dude should just do something like increase the tax rate .2% every quarter until it reaches 10%.

[Takechanpoo]

the recent increase of J-economic disparity is due to the increase of irregular employment, not the increase of the rich, unlike the rest of the world. and most of them are the younger generations.
http://www.mhlw.go.jp/toukei/saikin/hw/ ... /dl/03.pdf

[Russell]

the recent increase of J-economic disparity is due to the increase of irregular employment, not the increase of the rich, unlike the rest of the world. and most of them are the younger generations.
http://www.mhlw.go.jp/toukei/saikin/hw/ ... /dl/03.pdf

Yes, that is a good point!