Japan's Vice Economy Minister states risks of next tax hike


Compared to its previous hike, the Japanese government needs to be more cautious regarding its upcoming decision to raise the national sales tax, warns Vice Economy Minister Yasutoshi Nishimura.

Nishimura highlights that the sharp decline in consumer spending from the 3% tax hike in April is proving prolonged, and hopes that the Bank of Japan will decide on further monetary easing as appropriate.

Meanwhile, Prime Minister Shinzo Abe is to soon decide whether to proceed with the proposed plan of raising the national sales tax even higher, lifting the rate to 10%.

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Comments (1)
  • King Rat
    , contributor
    Comments (1556) | Send Message
     
    Tax hikes to pay for subsidies to boost the economy that fell after previous subsidies failed.

     

    Command economies are great in theory but in reality they just do not work out as planned. The commandeers of the economy keep failing to understand two basic principles.
    1) for every action there is an equal and opposite reaction.
    2) subsidizing inefficient interests punishes the efficient interests.

     

    In Japan's case, the inefficient interests are large "convoy" corporations the politicians protect legally and financially in return for advisory roles on the board of directors after retirement from politics. To them there is little difference between start up corporation and upstart corporation. In essence the politicians abuse their positions of power to enrich themselves at the cost of the overall nation. By punishing the smaller corporations they are retarding the proliferation of intellectual capital that is the lifeblood of the Japanese economy. These politicians keep trying to hoard larger and larger pieces of a pie that their policies make smaller and smaller. By any other name such acts would be called treason.
    27 Aug 2014, 04:10 AM Reply Like
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