More Talk of Consumption Tax Increase

[Mulboyne]

Tax hike looming due to impasse in spending cuts

"The fiscal 2005 budget is likely to mark the turning point in government fiscal policy, shifting from cutting expenditures to increasing tax revenues," said a ranking ministry official.
The extension of this argument inevitably leads to a hike in the consumption tax.
Chief Cabinet Secretary Hiroyuki Hosoda has already referred to the need to raise the consumption tax.
With any tax-increase plan certain to become a controversial issue that may shake the government's political footing, the government's fiscal reconstruction efforts have taken a new turn burdened with "a time bomb" in the form of a consumption tax increase.

Most economists still doubt the likelihood that we will see an increase soon. The economic recovery is still fragile but, if it gathers pace, the tax take ought to increase without raising rates. However, the Ministry of Finance is desperate to get a higher consumption tax rate in place so watch this space

[kamome]

The prices in Japan are already too high. A consumption tax hike would be awful--but didn't they raise the tax once already? If they did it once, they'll be able to do it again despite the political fallout. And I believe they've already raised the enterprise tax, although that was probably easier to do since it mostly impacts corporations.

[Mulboyne]

didn't they raise the tax once already?

Yes, it was introduced at 3% and then raised to the current 5%. All tax advisory panels have recommended shifting Japan's taxes from direct (e.g. income) taxes to indirect (e.g consumption) tax. It is always bad news in the polls but MoF constantly raise the issue and it, depending on the political winds, they do get a hearing.

[Captain Japan]

The prices in Japan are already too high. A consumption tax hike would be awful--but didn't they raise the tax once already? If they did it once, they'll be able to do it again despite the political fallout. And I believe they've already raised the enterprise tax, although that was probably easier to do since it mostly impacts corporations.

Effectively it has already begun. The move earlier this year that forced retailers to include the consumption tax in the sticker prices on goods was the first step. This way, when the tax is eventually increased, the impact on the consumer will appear less since he/she won't see it as a tax increase, just an increase in the price of the product as a whole. The only question that remains is: when will it happen?

[Mulboyne]

Keidanren calls for sales tax hike to avert financial plight

Tuesday, September 14, 2004 at 04:18 JST
TOKYO — Japan faces financial collapse in fiscal 2025 unless the consumption tax is raised to accommodate the amount of government debt, which is expected to be five times larger than the nation's gross domestic product, the Japan Business Federation said Monday.

Nippon Keidanren, as the powerful business lobby is commonly known, added in a report that without the tax hike, the national contribution ratio — the ratio of taxes and social security payments to national income — would top 100 percent in fiscal 2025. (Kyodo News)

[dingosatemybaby]

[Taro Toporific]

...t they ultimately plan to raise the rate to 20 or 25%, with no exemptions for food being discussed. I can't imagine a more regressive tax, and does anyone really believe it will all go to "social welfare" projects? Hell no. Think: CONCRETE.

Learn to love your social welfare!

[Mulboyne]

Here's the expected act two on the tax news:

Tax commission to recommend ending tax cuts

The Tax Commission, an advisory panel to Prime Minister Junichiro Koizumi, will compile a report in November that will recommend scaling down and eventually abolishing a proportional income and individual residential tax-cut scheme, commission chairman Hiromitsu Ishi said Tuesday.

"It will be difficult to manage (national finances) without scaling down and eventually abolishing the scheme," Ishi said at a press conference held after a general meeting of the commission Tuesday. "In my opinion, it would be realistic to reduce the cuts by half over two years starting in January 2006."

..."We're planning to begin scaling down the tax cuts from January 2006. Nobody can predict what the economy will be like in a year and three months, but we're going to decide now to abolish the cuts anyway," Ishi said.

Same double-whammy as 1996. Bureaucrats ask for an increase in the consumption tax and a cut in tax breaks, hoping for one of the two. Hashimoto's government was so weak that they passed both and derailed a nascent cylical recovery. Here's hoping they learned that lesson.

[canman]

But can't these people just look back at the figures they have pre-tax hike and post-tax hike and see the devastating effect it had on the economy before. I know the gov't needs money, but if they go ahead and do this tax increase, I have a feeling it will have a similar result to what happened in Canada in 1987. At that time the gov't needed more money, so they introduced a national tax, called the GST(Goods and service Tax). Now the gov't said that we were already paying these taxes, but they were hidden from ys. This way it would be out in the open and everybody would know exactly how much they were paying. Well prices jumped through the roof, and it effectively created a huge gray market, which exists up to today. In my home province of Ontario the combined sales tax is now 15%. I always get fooled when I'm at home shopping at how cheap things are, but after you get to the cash register and pay the tax, the prices aren't that cheap anymore.

[cstaylor]

Here's an idea: fire half of the MoF, and use that money to fuel these "social programs".

[Mulboyne]

Asahi: Taxes to be hiked under new strategy

Taxpayers are likely to face their biggest direct income tax hike in 50 years-and this time there won't be a cushion to soften the blow. Hiromitsu Ishi, commission chairman, said Tuesday that in its next round of tax reform recommendations, the commission is looking to target individuals. He said that the "main axis" of a report due for completion by the end of the month will be increasing the tax burden.
...On Tuesday, a commission subcommittee agreed to reduce and eventually do away with fixed percentage income tax cuts from January 2006. Without the benefit of tax cuts, those who fall into higher tax brackets could see their annual tax bills climb by about 290,000 yen annually. A Finance Ministry official defended the decision saying: "Unless we review the fixed percentage tax cut, which benefits income earners in the middle to high ranges, we cannot begin to enter into debate on increasing the consumption tax rate."
It is not the first time the Tax Commission has made noises about raising the consumption tax. In the past it has indicated it should be hiked to at least 10 percent.

[Captain Japan]

'21% consumption tax needed'/Panel says massive rate hike or spending cuts needed to balance books
Archiveless Gomiuri Shimbun

The government will have to either raise the consumption tax rate to 21 percent or cut spending by one third in 10 years time to achieve a surplus in the primary balance should the economy remain unchanged, according to midterm fiscal calculations.

The estimate, compiled Thursday by the Fiscal System Council--an advisory panel to the finance minister--and the Finance Ministry, is to be presented Monday at a joint meeting.

The calculation was made after compiling a forecast of the general account budget for fiscal 2014, which includes the effect of public pension system reform, implemented this year, but excludes any tax increases or sizable cuts in social security expenses.

According to the calculation, general account expenditure is projected to total about 120 trillion yen in fiscal 2014, up nearly 40 trillion yen from fiscal 2004, largely due to increases in social security expenses.

National bond expenses, including interest payments for bonds issued in past years, will double from the current level to more than 35 trillion yen, replacing social security costs as the largest expense item.

Meanwhile, revenues from taxes, stamps and other sources will total only 56 trillion yen, an increase of little more than 10 trillion yen from the current level.

The fiscal deficit, which stands at 36.6 trillion yen in fiscal 2004, is estimated to grow to 62.9 trillion yen in fiscal 2014, sending the deficit in the primary balance--where tax revenues equal expenditures, minus debt-servicing costs--to 27.8 trillion yen from 19 trillion yen in fiscal 2004.

To realize a surplus in the primary balance without increasing taxes, the government will have to cut spending in all categories, including cutting more than 2 trillion yen in public works spending and in local grant tax--a tax allocated to local governments--from current levels.

If the deficit is to be covered by tax hikes and not spending cuts, consumption tax will have to be raised to 21 percent from the current 5 percent, with the central government taking 56 percent of the tax revenue, according to the calculation.

The calculation was made by the ministry in response to a request from panel members compiling a report on state finances.

The calculation used figures on economic growth calculated by the Cabinet Office up to fiscal 2008, and a 2 percent nominal growth and a 1 percent consumer price increase for fiscal 2009 and up to fiscal 2014.

A midterm fiscal calculation is compiled every year by the Cabinet Office. This marks the first time a trial calculation projecting the revenue and expenditures under the general account budget has been drawn up 10 years in advance.

This fiscal projection is sure to trigger a heated discussion over state finances within the government and ruling camp.

[Mulboyne]

Bloomberg: Japan's Planned Tax Increases Raise Concern of Recession
Japanese income taxes aren't going up until next year, and alarm bells are already ringing for the world's second-largest economy. The increases, including the phasing out of an income tax rebate and a possible sales-tax increase, are designed to reduce the world's largest public debt and to cover rising pension and welfare costs as Japan's population grows older..."The danger is that it can sharply reduce the outlook for the economy," says Rupkey. "The last time Japan took steps to reduce its public debt, the prescription nearly killed the patient."...more...

[Mulboyne]

Bloomberg: Japan Must Rethink Tax Break End as Economy Slides, Okada Says

Japan should reconsider plans to raise taxes after a report this week showed the world's second-largest economy slipped into recession for the fourth time in 13 years, the main opposition party leader, Katsuya Okada, said. The government "explains it as a flat economy, but rather, isn't it a recession?" Okada said in an interview broadcast today. "In view of this, the decision to end income tax breaks is clearly a mistake."

[Mulboyne]

Japan Times: Look for VAT hike on the agenda
It appears that Prime Minister Junichiro Koizumi is pushing the consumption-tax issue onto the political agenda. During a Lower House plenary session earlier this month, he said, in effect, that the value-added tax should be increased as part of overall social security reform. Until recently, Koizumi had consistently avoided this issue since taking office nearly four years ago, vowing that he would not raise the tax while in office. The government's Tax Commission is also taking a positive stance toward an increase. At a press conference immediately after Mr. Koizumi's statement, Mr. Hiromitsu Ishi, head of the panel, suggested that he would announce, perhaps as early as this autumn, a detailed proposal spelling out how much the tax rate should be raised and when...more...

[FG Lurker]

Japan's lower house passes national budget
AP, March 2, 2005

Japan's lower house on Wednesday passed an 82.18 trillion yen ($783 billion) national budget for the fiscal year starting April 1, boosting overall spending to deal with the country's rapidly aging population but making cuts in most other programs including defense.

[...]

Social security makes up the biggest chunk of the national budget and is one of the few areas where spending will rise. The 20.37 trillion yen ($194 billion) in spending - up 2.9 percent - is designed to help cover services for Japan's steadily growing population of elderly.

[...]

The budget cuts spending for defense by 1 percent and for public works by 3.6 percent.

(Full Story)

Not exactly related to consumption tax going up, but this is how they are spending it... Good to see public works go down, even if it is a small amount.

[Mulboyne]

Kyodo: Koizumi says no consumption tax hike decision before Sept. 2006
Prime Minister Junichiro Koizumi on Wednesday reiterated his government's policy of keeping the consumption tax rate at the current 5 percent and making no decision on a hike while he is in office. "I refrain from making a decision," Koizumi told the House of Representatives Committee on Financial Affairs. The premier's term of office expires in September 2006. "I think my duty is to implement administrative and fiscal reforms thoroughly. If I declare a consumption tax hike, efforts to cut budget expenditures will slow," he added. He declined to say whether a consumption tax hike will be included in the government's request on tax revisions for fiscal 2007 through the end of March 2008. The request will be compiled in August 2006.

[Buraku]

So it seems the USA is already in a recession but the numbers won't be clear for a while yet?

How Biden Could End the Debt-Ceiling Crisis by ‘Minting the Coin’
https://nymag.com/intelligencer/2021/09 ... ained.html
The president could bail the United States out of debt default by ordering the creation of a $1 trillion platinum coin.


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https://businessmirror.com.ph/2021/10/0 ... id-reboot/
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Japanese Yen Weakens On Easing Concerns Over Energy Supply, Debt Ceiling
https://br.advfn.com/cambio/noticias/Ja ... 36750.html
The Jpn Lost Decade
https://internationalbanker.com/history ... cade-1992/


US senators agree to extend debt ceiling to avoid default
https://news.yahoo.com/us-senators-agre ... 24396.html

Biden criticizes GOP lawmakers for 'dangerous' debt ceiling inaction, warns of interest rate hikes
https://www.foxbusiness.com/personal-fi ... rest-rates

and in Ron Watkins code monkey news...As of January 2021, Watkins was living in Japan.

Asian shares rise as receding debt fears spur Wall St rally
https://www.sfgate.com/news/article/Asi ... 515428.php

QAnon Claims Virtual White House Set Proves Joe Biden Is 'Fake President'
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[Buraku]

The Japanese stocks suffer ‘Kishida shock’ as new leader suggests tax rise
https://www.ft.com/content/a5561143-5cb ... 53e5a8097d
Japan's new PM Kishida flags chance of tweaking financial income tax
https://www.reuters.com/world/asia-paci ... 021-10-04/
Ally of Japan’s Premier Calls for Capital Gains Tax Hike to 25%
https://www.bloombergquint.com/markets/ ... hike-to-25

[Coligny]

If I want shitposted links on random topics I can use google myself…

[Buraku]

Japan's PM Kishida backpedals on raising tax on investment income
https://asia.nikkei.com/Politics/Japan- ... ent-income

If I want shitposted links on random topics I can use google myself…

Do you not miss the days when French were forced to run their trains and bus on time?

https://pic8.co/sh/CFT1Zf.gif

[Coligny]

Do you not miss the days when French were forced to run their trains and bus on time?

Never happened… not even the krauts could achieve that…



BTW, did your mom grew her hairs back ?

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