Ozawa criticizes Noda for consumption tax hike plan
TOKYO —
Former Democratic Party of Japan Secretary General Ichiro Ozawa has criticized Prime Minister Yoshihiko Noda for considering a 10% consumption tax hike to pay for the rebuilding of the disaster-hit Tohoku region.
Speaking to a group of supporters, Ozawa on Wednesday criticized Noda’s plan and expressed his fears about the public’s diminishing faith in the DPJ. He said the public is not receptive to a tax hike at this time, TV Asahi reported.
Ozawa also hinted at the possibility of a revolt should the tax increase be pushed through, potentially causing a schism in the party.
Noda plans to submit a bill to the Diet by next March to gradually double the consumption tax to 10% by 2015.
Raising the consumption tax will be a divisive issue for Noda’s government which is grappling with social security and tax reform, as well as a strong yen.
There has been strong opposition to a consumption tax hike both among lawmakers and industry groups who say it will have a negative effect on the Japanese economy. However, the Finance Ministry says that if there is no tax hike, the nation’s social security coffers will fall short by 2.7 trillion yen in 2016.
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4
Michael J. Morris
Ok Ozawa, what do you propose? It is because of dumbasses like yourself that Japan finds itself in the worst debt situation of all industrial countries. While I don't like the idea of a tax raise, I'm sure most don't, something has to be done. You don't offer any alternatives, and with your plan, you just want to keep spending, it has to stop!
4
Yubaru
So Mr Ozawa worrying about the public's diminishing faith in the DJP? Ever take a look in the mirror?
0
John Becker
He'd been quiet for a while. Maybe he figures we're far enough removed from 3/11 to forget the mess he caused.
1
tmarie
Why is this man not in jail??? Why is he still allowed to be in the government? Why does anyone care what he says?
I am certainly not happy with a 10% tax, and agree with him on that, but does he not get that he helped cause this issue??
1
cactusJack
It has nothing to do with rebuilding! Just an excuse to raise it!
1
smithinjapan
tmarie: "Why is this man not in jail???"
Because it's Japan. Don't forget, you can resign due to scandals from the highest positions AT LEAST four times and still have a chance to be PM. It's one big 'old boys' club and they've all engaged in the scandals like this man has.
That said, I agree with other posters: what does Ozawa propose? I bet if he'd succeeded in becoming PM for any of his runs to do so he would have already raised it. And if he is, god forbid, able to run again (again, this is Japan after all!) and become PM, we all know he'll raise taxes. So what then? Will he say it's because of Noda? because of Kan? because of anyone but himself and his hand-puppet Hatoyama?
2
Tatanka
I'd like to see an itemized list of what the government is going to "rebuild" since I fear most of the money will just disappear like the current 5% consumption tax.
0
tmarie
Well said Smith and Tanaka. Thing is, they never ever offer a solution. Just complain and moan and state that whatever is proposed won't work. Hence why this country is slowly going down - sadly, with a revolving captain.
2
jinjapan
i have yet to meet a japanese person who is against the tax hike. obviously, they're not pleased , but they feel something has to be done b4 the country falls too deep to recover. how about a luxury tax & removing taxes from perishables .
0
edojin
The story above says Noda is considering a 10% consumption tax hike to pay for the rebuilding of the disaster-hit Tohoku region. Later it says the consumption tax is to be doubled to 10% by 2015. So is the 10% statement worded properly? Also ... it has been reported widely that the consumption tax is to be increased to cover rising costs in the social security system, which wasn't mentioned above. Just hope Minshuto isn't like Jiyuminshuto (the Liberal Democrats) and raises taxes just to stuff their own pockets ...
1
sillygirl
ozawa - who the heck is he again? he has just got to get his name out there every once in awhile lest his minions forget about him. i sure wish they would.
-3
j4p4nFTW
Taxes must not be raised under any circumstances. Nothing destroys an economy like high taxes. Japan needs its own Grover Norquist to be a hero of the people by having politicians sign pledges to never raise taxes no matter what!
-6
just-a-guy
For Mr.Ozawa, he has a better plan to solve the budget for 'disaster recovery' Just expel those US marines out of Okinawa, saving those money for the Tsunami refugees. He was a real 'patriot' who dedicated himself for Japan. It was definately 'a shame' that people of Japan unappreciates him and his idea
3
zichi
All politicians of all parties should be pulling together, and in the same direction with the 3/11 disasters at the top of the agenda.
0
smithinjapan
jinjapan: "i have yet to meet a japanese person who is against the tax hike."
I don't think there's anyone in the nation, Japanese or otherwise, who are adamant that a hike is not necessary, but the question is where the tax money will actually GO that worries a lot of people, and the idea that certain tax hikes will be 'temporary' is ludicrous. Once raised, they NEVER go down, save for cuts for the rich corporations in some cases.
As for Ozawa again, has he EVER actually stated a plan for ANYTHING he would do? I know he made a bunch of ludicrous promises that were impossible to implement (and blamed others for failing to do so), but still.
0
Jared Norman
japan should just declare bankruptcy and perform a controlled default. The credit rating is already bad.
0
Serrano
"social security"
Whatever happened to not spending more than you take in, and saving some of it for the future?
0
issa1
It is the Father giving a slap on the wrist of son.
Sorry this coment,but that impresses me most is the physical resemblance between these two guys they seem to Twins.
2
trinklets2
I rmember in the 90's when the tax was raised to 5%. The plan then was to raise it to 10% in 2010. Better collection and streamlining expenses shld also be considered not just raising the taxes.
0
Serrano
Ozawa is good at criticizing, it's his job.
0
ThonTaddeo
Perhaps this is a bit of subterfuge by the pro-tax-hike politicians -- everyone knows how unpopulat Ozawa is, so if he takes the anti-tax position, the Ozawa critics including the knee-jerk haters will look more favorably on an increased tax, which is what seemingly all the politicians really want. Fast forward a few years, and the tax is implemented, it's permanent, and the government has plenty of money to play with and a nice solid elderly/retired base of votes. Those younger working people who have to pay out all this money? Who cares -- there aren't enough of them to influence anything!
0
gyouza
@zichi - wouldn't it be nice for a change?
You'd think the politicians in the same party might be leading the "unite" charge!!
0
zichi
gyouza,
yes! sometimes I think they couldn't organise a children's tea party on a Sunday?
1
globalwatcher
Shame on all Japanese polticians! They are all good at criticizing, but no solutions. They are not a problem solvers. If I were one of them, this is what I would propose.
1)I would not change retirement contribution years from 25 yrs to 10 yrs until the house in order..
2)Move up retirement age to 66.5 yrs or 67 yrs just like the rest of world standard.
3)Consumption tax hike only to luxuary items, not on food, medicine and daily necessary items.
4)Evaluate walfare reform.
5)Cut unnecessary spending bureaucrats (nagatacho) overtime pays and start firing unproductive bureaucrats and all level of politicians. Freeze pay for the next 5 years.
6)Lower the corporate tax, so that Japanese corporatons may come back to Japan. Japanese corporate tax is the highest in the world.
7)Work on JOB, JOB, JOB. Without GDP growth, consumpton tax hike is useless.
0
Shumatsu_Samurai
Ozawa's plan - more debt paid for by the next generation with a 40% basic rate of income tax.
At least Noda has the courage to propose increasing the sales tax. And before people start whining about taxes, as the Economist recently reported, Japan has the lowest tax take of any country in the OECD, at just 17% of GDP. There is plenty of scope to raise taxes in Japan.
0
globalwatcher
Shumatsu, I agree, but this is what bothers me the most.
With the way of old Japanese distribution system, this tax hike is more than likely to be higher than what Noda originally proposed once it hit consumers. He needs to focus on public spending cut at the same time.
0
minello7
Ozawa, Ozawa who?? I thought he was in jail already.
0
globalwatcher
Ozawa will lead you into grave.
Japan has no choice but raising consumption tax. For once, I hope Ozawa listen to IMF, S&P and Fitch. They have been giving Japan a fair warning in advance to prepare for another downgrading. Ozawa needs to face up to reality. I am surprised this guy is not in jail.
0
ThonTaddeo
Shumatsu, ther may be scope to raise taxes, but your first point is the bigger one: this is generational theft.
Today's elderly were able to build their wealth, buy homes, and raise their children without paying any consumption tax at all. There were able to get ahead and have a solid financial base much sooner than today's younger generation, who is already losing 5% on top of everything they buy.
Now, when there's a shortfall in pension money, they should be cutting benefits to these people, not taking money from working-age people, who are already worse off than their elders were at the same age.
It may not be easy to live on a pension, but today's pensioners had a much better shot at saving enough money to keep the pension as a supplement rather than something they're dependent on. Try saving enough for a comfortable retirement when 5-10% or more is being taken frmo you every time you spend money!
I read (sorry, no link) that the median age-point for wealth -- that is, the age where exactly 50% of Japan's wealth is held by people who are younger, and 50% by those older -- is a ridiculous 71 years. I don't begrudge the pre-WWII generation their money -- they suffered in the '30s and '40s like no one born after the war ever has -- but now we're seeing baby boomers, who unlike their children have lived a life of steadily-increasing affluence since birth, retiring and demanding blood from a stone.
If there isn't enough to maintain current beenfit levels, then the beneficiaries should make do with less. There's no excuse for making an already-rich class even richer off the backs of workers who have no chance of ever seeing that luxury in their own old age.
0
Shumatsu_Samurai
I agree that retired people in Japan need to make sacrifices - either by retiring later or seeing reduced benefits, whether from their pensions or other government spending. But in response to your point about the benefits the older generations have had, retired people could equally argue that when they grew up times were tough and they had to work for their success. Young people now don't have the prospects previous generations did in the 1980s, but few starved either.
A consumption tax increase affects everyone, so it is reasonably fair. Pension/health care reform is possible, but it will require consultation and discussion, which will take time. Whereas raising the tax is guaranteed income that will flow quickly - the government badly needs.
And given Japan has a deflation problem, increasing consumption tax (and therefore prices) might help get people spending again rather than waiting for ever lower prices.
0
Seiharinokaze
Consumption tax hike is not for rebuilding Tohoku region. They already proposed a separate "restoration tax" on income for Tohoku. Consumption tax hike is nominally for pension and fiscal balance.
Ozawa criticizes the Finance Ministry and its puppet DPJ government after Kan's which try to raise sales tax on the pretext of the above two reasons when they never rethink about giving much subsidies (12 trillion yen) to numerous meaningless administrative corporations (4600 of them!) to which bureaucrats "descend" and revolve around one after another while getting an enormous salary and retirement allowance. The State budget, Ozawa says, is an estimation of costs by each ministry that wants to take as much as possible from the national coffer. It's what bureaucrats drafted with their ulterior motives in mind. Politicians' job therefore is to sort out what's necessary from what's not and prioritize. Raising tax should be the last resort after implementing every other means. But such politicians are abhorred and being deliberately put out of the way.
BTW, in this age of declining birthrate, children will get almost what their parents have. Present younger have-nots are not necessarily lifetime poor in terms of assets.
0
Shumatsu_Samurai
There is no reason to believe that Ozawa would stop that if he was in power. Indeed, given his old-style politics I'm sure he'd maintain the status quo - or make it worse.
What their parents have . There's no guarantee it will be substantial.
0
lastog
Before Mr. Ozawa opened his mouth, he should present his solution. Talk is cheap.
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