[Weekend Countdown]: 8 Reasons Why Japan Should Not Increase its Consumption Tax

Why would you increase the consumption tax to ten percent when…

  1. You can cut the salaries of Diet members from the average ¥21 million to ¥14 million, saving ¥4.3 billion in the process? Freebies like free train tickets, free flights, and free secretaries can go as well.
  2. You can shrink the bureaucracy. The Japanese government hires one million people. Compare this to the 1.7 million hired by the US government, to govern a population thrice as large as Japan’s. I don’t advocate kicking people out of jobs, but there are clearly inefficiencies that must be eliminated.
  3. You can hike taxes on tobacco and alcohol, improving the health of the general population in the process and cut healthcare expenditures.
  4. You can stop with the quantitative easing.
  5. You can stop with the electric car subsidies. Not everyone wants on needs an electric car, and those that have one put a strain on the already strained power grid in Japan.
  6. You put more money into pork-barrel projects to appease the overwhelming overrepresented rural population than in R&D or education.
  7. You bought 179 F-35s when they’ve only built 63 (ever) and cost hundreds of millions of dollars per aircraft. Defence spending to spur the domestic defence industry is good. In this case, however, Japan’s just giving money away to the Americans, which seems redundant given their presence on Okinawa.
  8. You can’t even make up your mind. The LDP wanted a tax hike under Taro Aso. Now that a different party’s in power, it has turned a hundred and eighty degrees and is calling the notion of a tax hike irresponsible. Funny thing, politics.

So why should Japan increase its consumption tax? Given the above, it really shouldn’t.


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