Probably resulted in more tourism for Hawaii. Japanese love to come to Hawaii to shop.
The only way to increase sales taxes without this happening would be to accompany the increase with a simultaneous income tax decrease.
> Japan raised its sales tax from 5% to 8%.
Wow, I wish I only had to pay 8% sales tax. I live in the Totalitarian Dystopia of New York. My sales tax is 8.875% and it’s a killer.
Sorry, but I’m not buying this (too high a tax on credulity). Canada had a national consumption tax at 8%, without the drop in sales this article claims resulted in Japan. When it was lowered by a couple points, we also didn’t see a big jump in consumption. Same goes for Europe, and many other countries with consumption taxes.
High aggregate taxes are a concern — but, consumption taxes actually disrupt the economy less than income taxes.
The point is, you’re supposed to REPLACE the income tax with the consumption tax, not add it to the burden!
Tell me are there ANY free market political parties in Japan? When even the “right wing” does this a nation is trouble.
You can’t repeal the Law of Demand...as prices increase the market will demand less. Happens in the US too. Minnesota raised cigarette taxes so that cigarettes cost 40-50% more than in surrounding states and Minnesotans within an hours drive of the state borders are buying their cigarettes in neighboring states. Not only are cigarette tax revenues less than predicted, Minnesota merchants in communities near the borders are see their business significantly decline as shoppers are not only buying their cigarettes in surrounding states but doing other shopping as well.
A sales tax is vulnerable to consumer psychology. Government revenues drop off during the very periods where you need government to intervene.
If Japan had seen a 3% hike in prices due to inflation, they would see some drop. But this level of dorp probably started as a consumer protest. They quit buying. But as soon as they do, everyone has to quit buying, because you didn’t make any sales last month. And now Japan has a full scale recession on their hands.
I think raising import tariffs and lowering individual and corporate income taxes are the way to go for America. It would restore American industry. Putting people back to work.
A sales tax is vulnerable to consumer psychology. Government revenues drop off during the very periods where you need government to intervene.
If Japan had seen a 3% hike in prices due to inflation, they would see some drop. But this level of dorp probably started as a consumer protest. They quit buying. But as soon as they do, everyone has to quit buying, because you didn’t make any sales last month. And now Japan has a full scale recession on their hands.
I think raising import tariffs and lowering individual and corporate income taxes are the way to go for America. It would restore American industry. Putting people back to work.
Do they also have a “federal” income tax system? I’d be curious if they have both....