politics

Japan ready to roll out more stimulus to cushion sales tax hike

38 Comments
By Tetsushi Kajimoto and Yuko Yoshikawa

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38 Comments
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60% of the time, it works every time

0 ( +1 / -1 )

60% of the time, it works every time>

shakes head That doesn't make sense.

Anyways, I'm optimistic. Keep on going, Abe-san!

-14 ( +3 / -17 )

Japan needs stimulus?, the tax base is shrinking, the old need welfare (deserved) and these problems apparently are not a priority? Ok print more money. What a bizarre Government.

2 ( +5 / -3 )

The housing loan tax break is nice. More along those lines, please.

0 ( +2 / -2 )

"Japan’s economy is on a firm footing..."

Um, I know some economists that would seriously disagree with that sentiment.

2 ( +3 / -1 )

I still think they ought to cut the tax to the original 3% and CUT SPENDING!

1 ( +4 / -3 )

Conditions last year were as good they were ever going to be. Despite this, record monetary easing, and unprecedented "stimulus" resulted in net growth of only .9%, or about 1/3 the official estimate from March of last year. Conditions this year are less favorable. The tax is going to hit the economy hard, and there will probably be no "rebound" in the summer. Any new stimulus is merely handing out money borrowed (perhaps "stolen" is a better word) from the taxpayers and handing it out to contractors and the politically-connected.

That so much spending is required to offset the negative effect of the tax clearly shows that tax should never have been implemented in the first place. The political disconnect from logic is astounding.

2 ( +5 / -3 )

sangetsu: "That so much spending is required to offset the negative effect of the tax clearly shows that tax should never have been implemented in the first place. The political disconnect from logic is astounding."

Couldn't agree more. Building up so much debt to finance a tax hike that will make the nation suffer even in the short term is going to cause it to collapse in the long term. They obviously realize the tax hike is going to hurt them and hence need so much stimulus, but they can't turn back now.

1 ( +4 / -3 )

When will they stop this madness?

2 ( +3 / -1 )

The headline is perfect JT and the word "CUSHION" speak by itself. You won't feel the impact of fall but eventually you'll fall.

0 ( +1 / -1 )

Bad policy yields bad results.

-2 ( +1 / -3 )

Most of the stimulus money will go to Mitsubishi Heavy Industries and other armaments manufacturers. Meanwhile, we can expect to see indigent Japanese seniors eating cat food from cans before long.

0 ( +1 / -1 )

No matter what the government does to help, the fact that is that most companies are not giving people raises. In fact most companies that I've been talking to you are actually cutting people's jobs! I fail to see how this is going to help stimulate the economy when people are losing their jobs!

Abe pull your head out of your butt! You are a liar! OMG your politician I'm sorry, you can't help but be a liar!

Winston Churchill once said, "hey country that tries to tax itself out of a recession is like a man standing in a bucket trying to pick himself up".....

0 ( +1 / -1 )

The tax is going to hit the economy hard

I disagree. The Nikkei conducted an interview of 100 presidents, asking them about the effects of the tax increase. Over 70% answered that the effects would be minimal (ie no change or less than 5% change in sales, YOY).

-3 ( +2 / -5 )

Japan ready to roll out more stimulus to cushion sales tax hike

in other words: Red Carpet Welcome To National Debt (!)

1 ( +2 / -1 )

Japan ready to roll out more stimulus to cushion sales tax hike Deputy Chief Cabinet Secretary Katsunobu Kato told Reuters while on stimulants.

0 ( +0 / -0 )

Japan’s economy is on a firm footing

This must be some special meaning of the word "firm" that I'm not familiar with.

At least, that's the only way I can make any sense of the statement.

1 ( +2 / -1 )

More bizarre is the % of the public that are OK with or even want the tax increase.

3 ( +3 / -0 )

"More bizarre is the % of the public ....even want the tax increase."

I've heard that. The tax hike is aimed at giving consumers assurance that their future social security is being taken care of. Once they feel assured, they will continue to spend today, instead of saving for their retirement. That's the theory, anyway.

2 ( +2 / -0 )

Ridiculously stupid policy.

-2 ( +0 / -2 )

Total BS, people buying from Japan outside of Japan DO NOT PAY SALES TAX! You can't blame exports dropping on the sales tax increasing!

0 ( +1 / -1 )

If everyone refused to buy anything other than absolute necessities from April 1, this tax hike would be rescinded real quick. I'll set an example the first 2 weeks, but I'm guessing most people will just "shouganai" this and pay 8% on everything they usually buy, but it'll mean everyone will just have to basically buy 3% less of everything, unless they can somehow increase their income by 3% from April 1.

2 ( +2 / -0 )

Good Grief! What a bunch of Malarky! Another Band-aid that won't stop the hemorrhage. In a capitalistic society history has shown that when the population decreases so does the GNP.... Sadly, Japan is on the way to be an inevitable has been.

0 ( +1 / -1 )

SerranoMar. 23, 2014 - 10:50AM JST I still think they ought to cut the tax to the original 3% and CUT SPENDING!

I totally agree. Here's my top 5 things they should stop wasting money on:

Whale hunting - expensive, unnecessary and it just irritates the international community Nuclear Power Plants - We don't need more thank you. 2020 Olympics - How many billion for a new stadium? No thanks. Its my tax money and I won't see a dime in profit. TEPCO subsidies - No more. In fact, they declared a fat profit, make them pay some of it back!! Farming subsidies - Face facts, Japan cannot produce enough food to feed itself, it is a simple population to farming area issue. Stop paying fat subsidies to farmers to produce massively overpriced fruit and vegetables and just acknowledge that fact that you're already importing 70% of the food in Japan, so you might as well import 90%, because in the event of Japan being cut off there is no difference between 70% of the population starving and 90% starving... they'll eat the politicians first in either scenario.
-11 ( +1 / -12 )

I am all for sales tax hike to restore Japanese National Health care. You have no choice. That's reality.

-4 ( +1 / -5 )

The whole economy is going to come crashing down. This tax hike is used to take money from the struggling middle class to keep things going a while longer. The stimulus is used to take what's left of the country before the crash and divide it up between politicians and their friends - so they'll have an even fatter cushion when it all comes tumbling down.

Sales hike to restore health care? Hah! They're just trying to keep the boat afloat a bit longer while they finish looting the safe.

And to think there are actually ordinary people who believe this will all work out in the end. A country as productive as Japan can recover from a crash fairly fast, but that will mean getting rid of the bloated government and its cronies and a obstructionist bureaucracy. So the guys in power are cashing in now.

2 ( +2 / -0 )

I repeat this.

I am all for sales tax hike. Do you want to take Japan to get off the cliff? Whoever disagree with me, make sure you know the number of national sovereign debt and you voted for every election. Otherwise, you are just whining like an annoying wife.

-2 ( +1 / -3 )

Japan does not need a tax hike. Just cut down on construction project corruption and amakudaris. Japan is not going to default because of the debt.

-2 ( +1 / -3 )

Thomas AndersonMar. 24, 2014 - 11:04AM JST

Japan does not need a tax hike. Just cut down on construction project corruption and amakudaris. Japan is not going to default because of the debt.

But truth of matter is that a majority voters wanted the LDP to come back while the LDP was quite open about this from the beginning.

I still think the sales tax hike is absolutely necessary and the IMF shares the same opinion with me on this. I have already examined a balance sheet of Japan for the sovereign debt. Sales tax revenue is a penny in bucket, but every penny counts. That's how bad the sovereign debt of Japan is. It is very serious.

-2 ( +0 / -2 )

You're not going to make more money by adding more tax. That's not how you stimulate the economy. It's just yet another "austerity" measure, which will just make things worse.

The tax increase is just going to be used for more corruption. We don't even know how the tax are used in Japan. The citizens don't even get to decide how the national budget should be used.

That's how bad the sovereign debt of Japan is. It is very serious.

No, that's just scaremongering propaganda or ignorance of the Japanese economy.

0 ( +3 / -3 )

kickboard," The Nikkei conducted an interview of 100 presidents, asking them about the effects of the tax increase. Over 70% answered that the effects would be minimal (ie no change or less than 5% change in sales, YOY)."

Ok. Now ask a fair representation of the public instead. See if you get the same result.

Indeed, the sales tax is but a penny in the sovereign debt bucket. In fact, the increase will have no positive impact on it, especially not with all the increased "stimulus" in attempts to "cushion the impact". To the people, who will get not a cushion but a boot to the head, the impact will have a distinct damaging effect. Maybe you can't feel it from Colorado.

-1 ( +2 / -3 )

I agree the debt problem is very very serious. It's so serious that a tax hike will do almost nothing to address it. Especially when there's no accountability as to how the money is spent. It may make it worse, hard to say. Japan has to import oil to keep the engine running, especially with nuclear power off the table.

Japan has to either default (tell all those people they can forget about their pensions) or inflate. Or both. Historically, countries that can will use the press to keep making more money - until faith in the currency collapses. The bright side is, Japan is one of the few countries where people might accept a 50% cut in their pensions without rioting.

The problem is not with raising taxes. It's with paying yet more taxes to an unaccountable government that has already misused the taxes they collected before. Look where the stimulus money is going. The usual suspects.

1 ( +1 / -0 )

Thomas AndersonMar. 24, 2014 - 12:28PM JST

That's how bad the sovereign debt of Japan is. It is very serious.

No, that's just scaremongering propaganda or ignorance of the Japanese economy.

You have a data

That's a quite insult, isn't it? You have no idea what I did before retiring. I would like to think I have a better qualification in economics. What bothers me the most is that your statement is not true. Japanese sovereign debt is quite serious.

John GaltMar. 24, 2014 - 04:24PM JST

Indeed, the sales tax is but a penny in the sovereign debt bucket. In fact, the increase will have no positive impact on it, especially not with all the increased "stimulus" in attempts to "cushion the impact". To the people, who will get not a cushion but a boot to the head, the impact will have a distinct damaging effect. Maybe you can't feel it from Colorado.

Japanese sales tax needs to be raised. The BOJ stimulus with tax hike will do some tricks. Next target is a payroll tax hike from 2%. Why? You have spent too much to create a huge national debt and you need to pay for it.

Colorado? Well, we are doing lot better than 3 years ago. Thanks to progressive thinkers and policy makers. With high tech technology, we can now participate, LIVE, in decision makings (town hall meetings) process from home.

-1 ( +0 / -1 )

Send that stimulus my way...I know how About a 100,000 food stamp voucher for everyone! Even though food costs are so high here, I'll use mine to eat like a swine for a few months...

0 ( +1 / -1 )

It is like being robbed at gunpoint and then having some of the money taken from me handed back by the robber in order to "cushion" the robbery. Yes, that is just brilliant. I fill stimulated already.

The craziest thing is that this completely idiotic policy is not only enacted in Japan... it is pretty much the basis of Obamanomics too. If that is any consolation...

1 ( +1 / -0 )

Except that even some of the money back may not be handed to you, but to another passerby.

0 ( +0 / -0 )

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