Fukuda: Now is “crucial” time to act on sales tax

7 Responses to “Fukuda: Now is “crucial” time to act on sales tax”

1. hitNstun on June 19th, 2008 1:26 pm

   What does he want to raise the tax rate to? The public won’t be happy with the 20% or so they need. Can’t this guy give specifics on anything?

2. BlogD on June 22nd, 2008 11:39 am

   Yes, a sales tax hike right now would do wonders for an economy struggling to increase consumer spending. Just like it did the other two times they did it–as I recall, both times, the economy jut rocketed upwards for years after, right?

   Why are the politicians so keen on this, really?

3. Ken Worsley on June 22nd, 2008 8:28 pm

   I don’t think they see any other possible way to raise funds. Tax revenues were lower than all projections (yet again), and the pension fund is somehow being mismanaged to the point of actually losing money. Government debt is at least 150 times GDP (Edit: 150 percent of GDP, not times). Add the greying of the population and the resistance to any kind of government reform that would cut spending, and there are few options left.

4. BlogD on June 23rd, 2008 11:05 am

   I see what you mean, but the problem is that raising the sales tax will dampen sales and hit the economy badly, reducing government revenues that way and probably taking away what they gained while depressing the economy at the same time.

   Why such resistance to cutting spending? Is pork that strong here?

5. Garrett on June 23rd, 2008 3:24 pm

   Ken, I think you mean that is at least 150 percent of GDP.

   BlogD, yes.
   Look at the recent gas tax debacle. Tanakaism is open corruption (and I don’t think you’d have to go far to find academics or even politicians who would agree with me), the Prime Minister and the opposition both suggested at least moving revenues to general funds instead of earmarking them for unnecessary road consturction (read hookers, massage chairs, and kickbacks for bureaucrats) and the PM pushed for such a change to occur in 2009, yet the gas tax regime was renewed for another decade as is. No change.

   Look at amakudari. While not pork spending exactly, it is a drain on government resources and a widely acknowledged problem that no one can overcome.

   Pork spending was such an intrinsic part of Japan’s economic rise and has for so long been so common, rampant, and intractable, that we are now saddled with a legislature in which few, if any, members can even conceive of another way of doing things. That and, just as in pretty much every other democracy, every rep is in favor of cutting all the pork, but his own and is quite willing to make deals to protect his own.
   Do you know of any country in which pork spending has actually been reduced to the point at which it helped the budget?

6. pelz on June 26th, 2008 12:37 pm

   Will Fukuda even be around long enough to push this issue?

7. W. Anthony Malcolm on June 28th, 2008 9:21 am

   Ken,

   I thought that the Lower House passed a vote of no confidence in Fukuda? I saw that on the news, or read it somewhere. I could be wrong. I have been known to be wrong, from time to time.

   Off the topic, I know, but some clarification would be wonderful.

   Peace

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