DPJ considers raising tobacco, inheritance taxes to limit income tax hike
TOKYO —
A tax commission set up by the ruling Democratic Party of Japan said Thursday that it is considering hiking tobacco and inheritance taxes to fund reconstruction in the disaster-hit Tohoku area.
Last week, the tax panel outlined two proposals for hiking taxes that would generate 11 trillion yen. At the outset, the commission considered a consumption tax increase, but Prime Minister Yoshihiko Noda asked for that not to be considered at this time.
The first option called for delaying a previously proposed 5% corporate tax reduction for three years, and raising income tax by 5.5% for 10 years, or 11% for five years. The second option also recommended shelving the 5% corporate tax reduction for three years, but the income tax hike would be 4% along with tobacco tax increase of 2 yen per cigarette.
However, on Thursday, some DPJ lawmakers said that raising income and corporate taxes would deal a big blow to the economy.
The DPJ panel said it is trying to alleviate the tax burden on the working population and added that it hopes to come up with a unified policy by Sept 30 in order to submit a bill to the Diet by mid-October.
Japan Today
Order by Time Order by Popularity
19 Comments
Login to comment
-1
some14some
overly simplified. do they sell single piece? no, a pack of 20 cigarettes...then why not say 10~15% hike on cig pack? No details of inheritance taxes? no, not yet, inhaling smoke tax comes first.
-1
Michael J. Morris
I think that a 40 yen a pack is too small an increase. Why don't they do as I think the health and welfare minster stated last week, that she would like to see the price go up to Y700 per pack, which is still cheap compared to most western countries. As for the inheritance tax increase, I think this would be a good way to get elderly people with money to start to use it. I know some people will complain that this way they can't leave anything to their children, but they can, they will just be taxed a higher rate if they do. But in the meantime, if they begin to spend, then that money will make its way to the gov't through sales taxes and the economy will get a lift that way. I see no problem with either recommendation. the only people against this is the rich fat cat LDP members and supporters, as they are the ones with the most money!
4
Graham DeShazo
************Mr. Morris, I would beg to differ.
I do agree that raising the tobacco tax would be a good place to start. In fact, why not more? One the one hand, most smokers (Full DIsclosure: I am an ex-smoker) will pay virtually any price so that means more revenue. If they do quit because if the price increase, even better. The REAL benefit of a tax increase on Tobacco beyond any revenue increase would be to make smoking too expensive for teens to start.
On your support of Estate Taxes, I would take issue with your opinion that it is only the "Fat Cats" that would be affected. Japan has a ludicrisouly low point at which ti begins taxing what the deceased leave to their children and the rate of taxation is already so high that most families surrender real estate to the govt. as they cannot pay the taxes. Empress Michiko's family surrendering their prime house in Tokyo is a good example. If they don't have the money to pay, who really does?
I would make one further point on the issue of fairness. When a family accumulates capital through a life of work and saving rather than wanton consumption, had already paid taxes on the saved capital in the fom of income taxes, and then decideds to pass their money onto the next generation to make life a little bit easier for their children and grandchildren., who is to say that the govt. has a right to ANY of it?
I realize from a fiscal perspective that eliminating the estate tax is not a realistic proposisition, and that certain very high wealth individuals (George Steinbrenner's kids come to mind) should not just receive their parent's lagress as is, but a blanket raise on estate taxes would be grossly unfair to those of us who really are scrimping to provide a better future for our progeny.
0
cleo
That is so not true. No inheritance tax at all is levied on the first ¥50 million + ¥10 million per legal beneficiary. The spouse of the deceased pays no tax on the first ¥160 million. I don't call that ludicrously low at all, it's generous enough that most families pay little or no inheritance tax.
I don't think there was ever any suggestion that the Shodas 'don't have the money to pay' inheritance tax; donating a building in lieu is a legitimate means of avoiding liquidising funds. It isn't as if the family were turned out onto the street; the building was a liability, costing huge amounts to upkeep, and the owner (Michiko's brother) was probably glad to get rid of it.
People who have worked all their lives and accumulated a nest-egg can pass it on to their kids. The kids of the rich do just fine with their windfall. What's wrong with taking a bit of the surplus to fund schools, hospitals, infrastructure, so that the kids of not-so-well-off parents can have the chance of a better start?
1
Ranger_Miffy2
Thanks for that info, Cleo. Tax the cancer sticks as much as possible so people can't afford it and hospitals don't have to deal with their rotten demises. And let's ban all indoors smoking especially in restaurants, bars, heck, everywhere. :-D
3
DentShop
How can the government justify raising income taxes when the average worker in Japan has so little left to give? There is so much waste in Japans public spending too. Shouldnt that be addressed first?
-1
ExportExpert
Inheritance tax is not good, in japan it is already too high and unduly burdens families already suffering from the death of usually a parent , the property has already been taxed anyway, just a greedy bunch of politicians with their hands busily grabbing anything within reach.
Tax alcohol, pachinko, horse racing and tobacco harder.
0
marcelito
Exactly Dentshop... There is so much damn waste going on in the bureaucracy here that if they truly made an effort to cut it along with selling of selected assets ( I mean does the gov really need to have 50% stake in Japan Tobaco Co. as an example!?).or using the money in their " grey" funds , there would hardly be a need to raise any taxes at all.... But they know the J public will not get angry enough to toss them all out, hence they will tax the average Taro to the max , while protecting their own ...leeches.
0
smithinjapan
Agree 100% on raising tobacco taxes, but they should just put it up to 1000 yen per pack and be done with it. This 20 - 50 yen every couple of years is for the birds. As for the rest, I agree with DentShop -- cut out wasteful spending (and I mean actually DO it, don't just SAY you'll do it!) before jacking up the costs.
-1
JapanGal
Like your thinking Cleo
0
jforce
I'm afraid none of you see the big picture here. Taxing SINs is not the way to achieving the goal. You will target those with addiction problems to pay for your schemes. This is like stealing from the elderly who are on their way out anyway. How about the obese? Why not tax fast food and chocolate? How about MSG? It's a simple cash grab from people that need to be taught about the dangers and manners therein with smoking. As for the IT, it is another sad idea to penalize families for passing something on. Transferring property, business, and such should be a simple signature and then that person picks up the payments on whatever was inherited. Adding a tax to this on top of lawyer fees and reinvestment into business or property leaves nothing for the inherit-er. Government is simply out of ideas and they don't want to slash there own services and/or salaries, but instead target addicts and families as though there was any money left! Sickening that people agree to this.
0
zichi
no mention of the ¥17 trillion held in stocks by the government?
0
minello7
"However, on Thursday, some DPJ lawmakers said that raising income and corporate taxes would deal a big blow to the economy." this has to be the best this week. Have all those politicians forgotten already about 3/11, plus the last 20 years.
1
zurcronium
The old hold most of the money and spend the least overall. The government needs to get money circulating in Japan otherwise the economy just spirals downward, as we have seen the last 20 years now. Taxing estates is good policy socially, preventing somewhat the concentration of wealth that retards growth, and makes fiscal sense as well. Taxing smokers is the only way to get idiot smokers to quit, look at NYC now. Smoking rate is 14 percent due to highest tax in the USA and a strong public policy to keep smokers away from non-smokers.
These policies from the DPJ makes sense for Japan and is such a dramatic change from the LDP bridges to nowhere and airports no one uses corporate welfare while running up the debt strategy.
0
YuriOtani
Always good to punish the smokers, they need to pay their fair share! They need to work harder to get their fix.
0
cactusJack
How does a higher Inheritance tax make old people spend more? I don't get it.
0
Serrano
Heck, just make the rich people pay more, like Obama and the Democrats want to do in the U.S. Don't create wealth, spread what's left!
-1
okimike67
SO..... let me get this straight. You work for a wage (what ever it may be) and they tax you and now that is yours free and clear. How can ANYONE feel it OK to TAX that AGAIN????
Zurcronium and those that think like him (?) have NOCRANIUM. The uber LIBERAL forces in the US and elsewhere think if you are prosperous you MUST pay for those not as fortunate. Socialisim has ALWAYS and will always fail. When there is no incentive those that can wont and that just may leave the tax collector collecting chickens and carrots from the peasants gardens.
AND instead of taxing "smokers" (just the most recent "social tax" scheme, wait... one that hits you coming soon) they should tax the STUPID people so willing to take and spend OTHERS hard earned money.
IMHO
-1
okimike67
Adding to last: As a business owner I am very concerned with the TAX the companies approach that is being proposed in Japan and US (as well as many other locals). MORE TAX = Less Employees. PERIOD! Talk about compounding a growing problem. Sure sounds good in press releases to garner the "have nots" votes and may have some limited immediate benefit. But it will CERTAINLY fail and make a bad situation worse. Perhaps even unforgivable.
Back to top