IMF recommends Japan sales tax hike (to 15%... In addition to income tax; A disaster we don't want!)

UPI.com ^ | July 14, 2010

[xzins]

Japan should gradually triple its sales tax to 15 percent to stabilize the country's finances, the International Monetary Fund recommends.

The IMF suggested Wednesday following annual talks with Japan's government and the Bank of Japan that beginning in fiscal 2011 there should be "a modest consumption tax hike," Kyodo news service reported.

''A gradual increase of the consumption tax to 15 percent beginning in fiscal 2011 and distributed over several years, could generate 4-5 percent of gross domestic product of revenue," the IMF said.

The international financial organization said the sales tax hike could be paired with reduced personal income tax allowances and corporate tax reform to stimulate domestic investment.

Japanese Prime Minister Naoto Kan's broaching the idea of a sales tax increase from the current 5 percent is considered a key factor in the losses sustained by his Democratic Party of Japan in Sunday's House of Councillors election, Kyodo said.

[xzins]

The international financial organization said the sales tax hike could be paired with reduced personal income tax allowances and corporate tax reform to stimulate domestic investment.

These people are insane if they think this will "stimulate domestic investment"

The IMF apparently fully supports Obamanomics.

[gusopol3]

The price of demographic inversion?

[xzins]

going from a 5% sales tax to a 15% sales tax sure is inverting something.

Of great interest to Americans should be the fact that Japan ALREADY has a sales tax and an income tax and corporate taxes and the politicians still don’t have “enough” money.

[wiggen]

discourage consumption and lose income tax from corporations

[Ronin]

Stupidity!

If they raised the consumption tax that high, every single Japanese household would go into immediate budget lockdown. No eating out, no new clothes, no luxury items and certainly no big ticket items like cars, refrigerators or washing machines.

You have never seen frugality until you have seen a Japanese family seriously on the cheap!

A raise to 10% is just barely doable. Nobody likes the idea, but most of the public is resigned to the necessity. They can do the math.

But 15%? There is not a chance in the world that the Diet would approve that.

They’d be lynched!!!

[xzins]

I am firmly convinced that any income tax will always be unfair, unethical, and a springboard to socialism.

I’m equally convinced that any nation could easily survive with only a 5-9% sales tax and a few selective tariffs and fees. And I think they’d have more money in the long run.

[Man50D]

I am firmly convinced that any income tax will always be unfair, unethical, and a springboard to socialism.

You and Karl Marx. That's why he included a heavy, progressive tax on productivity as a plank in his Communist Manifesto.

I’m equally convinced that any nation could easily survive with only a 5-9% sales tax and a few selective tariffs and fees.

Tariffs and fees are other names for a tax. A tax by any other name.

[AmericanInTokyo]

Yep. It SUCKS allright. We have our share of dense saps over on this side of the pond, too, donchya know.

[xzins]

Tariffs and fees are other names for a tax. A tax by any other name.

Selective, and generally retaliatory toward those who would deny America equal access to their markets. So, yes, they are a tax. But they're also a tool against those who would take advantage of American open markets while keeping theirs closed.

[Man50D]

But they're also a tool against those who would take advantage of American open markets while keeping theirs closed.

The Fair Tax will accomplish the same by taxing imports from foreign nations but will not tax items exported by American firms.

[xzins]

You’ll have to explain that one to me.

[BobL]

I think people (Republicans and others) spend WAY too much time on the tax side and WAY too little time on the spending side. Of course the country wants the spending, but not the taxes, so we are kinda stuck.

If I were dictator for a day, I’d turn Social Security and Medicare into Welfare programs - make them means-tested and treat the elderly just like children with regard to child support - in other words, if an old person has kids, and one of them is a doctor - then that kid should pay the cost of his parent’s old age, not some stranger’s kid, at the point of a gun.

[BobL]

“You’ll have to explain that one to me.”

It’s called a trade war. We tried that stunt in the early 1930s and took what could have been a strong recession and made it into the Great Depression.

[xzins]

I don’t mind your turning them into welfare programs, but I do want you to give me my money back with interest. :>)

[Man50D]

You’ll have to explain that one to me.

Exported goods are not subject to the FairTax, since they are not consumed in the U.S. but imported goods sold in the U.S. are subject to the FairTax because these products are consumed domestically.

[xzins]

I’d use it only as a response. I see no reason to give country X free access if it doesn’t do the same. The tariff will make their version of Product Y more expensive since they’ll have to pass it on to the customer or eat it, and I don’t see them eating it.

[xzins]

How does that prevent Country X from refusing to allow my products entry into their country?

Good explanation on the other part, though. thanks.

[garbanzo]

If they raised the consumption tax that high, every single Japanese household would go into immediate budget lockdown.

But of course, austerity has to be imposed on the citizenry and not the government - the government gets to spend as much as it wants.

[Man50D]

How does that prevent Country X from refusing to allow my products entry into their country?

I was responding to your comment in post #10: But they're also a tool against those who would take advantage of American open markets while keeping theirs closed.

Right now Americans firms, on average, are at a 17% competitive disadvantage to their foreign counterparts. The Fair Tax will level the playing field by taxing foreign goods imported into the U.S. as is the purpose of a tariff.