Comments on: Consumption tax increase: Fairness is in the eye of the beholder

By: F. Hirsch

F. Hirsch — Fri, 15 Jun 2012 11:49:32 +0000

The remarkable failure of the article is to explain in detail the loss of purchase power of families making 5 million or more per year. It does consider the pensioner living on his state pension and for whom every trip to the doctor has to be planned financially. You can expand the cost of your shopping basket of food, if you can afford it, but how much can you reduce the cost of your food basket to make ends meet if you have to feed a family with an income of 150000 yen monthly?

By: Gio Makyo

Gio Makyo — Wed, 11 Apr 2012 16:34:58 +0000

It’s worth noting that both these tax increases — consumption and income –are coming hot on the heels of a doubling (!) of the residential tax in Tokyo (to pay for Gov. Ishihara’s failed banking scheme) and incremental increases in national health insurance. In a shaky economy, I can think of no better way to kill off disposable income and domestic demand — what are they thinking?

By: David Tsukiyama

David Tsukiyama — Tue, 10 Apr 2012 08:25:14 +0000

The public is right to not support an increase in the consumption tax. I don’t think the Ministry of Finance should be able to impose a consumption tax increase to finance public debt that was ostensibly created by the bureaucracy. Instead they should raise capital gains taxes, stop allocating resources to manufacturing and export orientated industries, finance a safety net to catch those who will be affected by the restructuring, and stop using the current account surplus as a measure of well being. Raising the consumption tax is not going to reduce debt, it will just depress consumption like their regressive tax plan in 1997. Which will just reinforce the pattern of domestic savings to finance overproduction, continuing the decline of income as a part of GDP growth. I am curious when will the Japanese people realize that the Japanese government, i.e., the bureaucracy has engendered extractive economic institutions, and there is no way to induce policy change because the Japanese bureaucracy operates in an extra-legal manner. It is not bound by civil or constitutional law. It is essentially an oligarchic elite that wishes to perpetuate its own existence and status in society at the expense of the population. Restructuring will result in massive destabilization and upheavals which will eliminate their control of society. In this they are not quite different from past extractive governments in history, and not quite different from China. Though I must point out that at least the yuan is explicitly pegged to the dollar and Chinese leadership is quick to explain that much of the costs of their fixed rate and export policy is borne by the Chinese population.