Comments on: Deflation Watch: New Year’s scorecard http://blog.japantimes.co.jp/yen-for-living/deflation-watch-new-years-scorecard/ How to make, save and spend money in Japan. Wed, 18 Feb 2015 03:29:48 +0000 hourly 1 http://wordpress.org/?v=4.2.4 By: Troy http://blog.japantimes.co.jp/yen-for-living/deflation-watch-new-years-scorecard/comment-page-1/#comment-169549 Mon, 13 Jan 2014 01:50:57 +0000 http://blog.japantimes.co.jp/yen-for-living/?p=5101#comment-169549 “Fifty-four percent of respondents said they have not made nor do they intend to make any “big purchases” before the increase goes into effect, and 62 percent of the people who are making big purchases say it has nothing to do with the increase”

since prices are set at what people can afford to pay, the consumption tax on stuff will hopefully come out of the producer surplus, as long as consumers factor in the 8% GST in their purchase decision.

As for the GST rise, I think there are better taxes to be levied (*cough* land value tax *cough*), but the bottom line is that Japan has been running a rather odd scam since the 1990s, cutting taxes and calling it savings.

http://research.stlouisfed.org/fred2/series/GGGDTAJPA188N

is japan’s debt-to-GDP since 1980. Utterly ridiculous! How the heck is Japan’s SMALLER future generation going to pay off the 1990s-now tax cuts???

http://www.ipss.go.jp/pr-ad/e/eng/images/04_01.jpg

2014’s 8% and 2015’s 10% GST is just a way to claw back the 1990s tax cuts out of everyone. It’s pretty regressive, which sucks. Japanese face a pretty progressive tax system, but it’s odd that it’s collecting so little money each year, just 40% of gov’t outgo (!)

By design I guess.

If “The System” thinks some wage-price inflation is going to solve the imbalance, I wish it luck!

The best solution is to tax 50%-to-GDP like the nordic states do, but since that’s a ~2X tax rise for Japan, I guess that’s off the table. . .

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