New Taxes

[Dogen Z]

Prime Minister Fukuda has told the press that a higher consumption tax is inevitable, although not for next year, to pay for Japan's huge fiscal deficit (i.e., internal or government debt) estimated to be from 96-147% of GDP depending on your source. This debt was accumulated during the "lost decade" when the government tried to buy it's way out of economic collapse following the bubble era--in other words, building bridges to nowhere. Now, the government wants the taxpayer to pay for its folly...the latest tax reform proposal lessens corporate taxes in, I think, an effort to follow global standards. Therefore, consumption tax may rise from 5% to about 7% or even 10%!

I think there is another good options than raising the people's taxes and making life more costly in Japan. I think Paul Krugman of MIT already suggested this but it was for the banking non-performing loan mess. The government should simply monetize the debt, i.e. print more money to pay off the debt. This has the problem of bringing inflation but Japan still risks the problem of falling into deflation as shown by the last 2 quarterly cpi measurments.

Has the government thought about this option? If not, why not? Why all the talk about having us pay for it without a thorough debate about options? If it needs a consultant, I can be had for a, ahem, slight fee.

 

[Dogen Z]

More on taxes

After reviewing the new tax schedule and seeing that the top tax rate has risen from 37 to 40% with an accompanying increase in minimum tax for this tax bracket, I feel better about paying a higher consumption tax. Okay, 2 or 3% would not be too bad except for the very poor. ☝

However, I still think some of the debt should be monetized as soon as the yen strengthens to about 105yen/dollar (this is point where exporting companies have difficulty making a profit--monetizing the debt would automatically weaken the yen. )

Also, cigarette taxes are too low. Another 50 yen tax per pack would be healthy (pun intended ) for the economy and help reduce smoking at the same time. It would also help to reduce health cost related to treating smoker's ailments not related to lung cancer--emphysema, etc-this the hackers' cough you hear so often, it's quite prevalent.

Well, I got this off my chest. I can breathe easier now. Thanks for your attention.

 

[Dogen Z]

One more thing...the LDP is proposing an extension of the special 10% tax rate for dividends and capital gains on stocks. They say that reverting to the normal 20% would cause market disruption. This is like sooo shibai!

Someone or some people with a lot of influence just wants to make a killing. This is in the same category as the LDP's infamous (stock) Price Keeping Operations. The 10% tax rate is the lowest rate in the tax schedule--its for the lower middle class. The 20% tax rate applies to people making between ￥3.3 M-6.95. I would guess that people in either class own very little stocks. So the benefit would go mostly to the wealthier class. what!!

The rich shouldn't be given preferential treatment and ending the special tax consideration would not disrupt the market. U.S. stock dividends and capital gains are treated as normal income so you'd have to pay more if you belong to in the upper tax brackets. THIS is fair treatment, IMO. Japan cannot afford this tax benefit for the rich while it suffers from such a huge fiscal deficit (which was created by the LDP).

OK, I got that off my chest, too. Sorry for the second rant.

 

[musicsalsa]

How many five star dining lunches and suppers did that take??

Prime Minister Fukuda has told the press that a higher consumption tax is inevitable, although not for next year, to pay for Japan's huge fiscal deficit (i.e., internal or government debt) estimated to be from 96-147% of GDP depending on your source. This debt was accumulated during the "lost decade" when the government tried to buy it's way out of economic collapse following the bubble era--in other words, building bridges to nowhere. Now, the government wants the taxpayer to pay for its folly...the latest tax reform proposal lessens corporate taxes in, I think, an effort to follow global standards. Therefore, consumption tax may rise from 5% to about 7% or even 10%!
I think there is another good options than raising the people's taxes and making life more costly in Japan. I think Paul Krugman of MIT already suggested this but it was for the banking non-performing loan mess. The government should simply monetize the debt, i.e. print more money to pay off the debt. This has the problem of bringing inflation but Japan still risks the problem of falling into deflation as shown by the last 2 quarterly cpi measurments.
Has the government thought about this option? If not, why not? Why all the talk about having us pay for it without a thorough debate about options? If it needs a consultant, I can be had for a, ahem, slight fee.

Watch the hands watch the hands...................it all a trick!
He said she said they said.
Working to pay taxes and the rubbish most people are brain washed into thinking they should have for themselves...the perfect couple...the children.