The 1st day of increased sales tax

It is the 1st day of the increased sales tax today. From 5 to 8%. It is sceduled to be risen to 10% next fall. They say it should be risen up to 20% in the near future to cover all the expenditure for the social security which is increasing in accordance with the progressed aging of the population.

I admit such taxation is inevitable to stabilize our society. But it is the problem how the government is going to use the increased revenue. So far as this rise of the sales tax is concerned, they will get 5 trillion JPY. At the same time, they have made a budget to stimulate the economy for the same amount of increased revenue. The 3% increase of sales tax is actually paid for the civil engineering business and the export business. Who knows they might go on the same expenditure from next budget on? So far, there is no trickle down realized in the economy at present which the government has insisted. Haven't they promised to use the increased revenue for social security?

BOJ has been buying the national bond without any limit for the past several years. It has started purchasing the long term national bond for the couple of years. It is hazardous. It would cause " a bad inflation". If BOJ stopped purchasing it, it would result in drastic drop of the value of national bond. BOJ could never stop issuing the national bond. An endless easing! I could hardly believe they have any means to do with progressive inflation which we could expect as a result of such easing. The people are not infromed that inflation is a transfer or money from us to the government. The government insists such an inflation could be controlled and would contribute to get out of the deflation. I could hardly believe in their both sayings.


  1. The economic lessons of the past are quickly forgotten from one generation to the next. I believe that revenue to government through excessive taxation should be strongly resisted by the public. This is because government will always spend everything that it is given and the people who pay the taxes have little control over how it is spent.

    Increased sales taxes are especially cruel on the poor because they are hit the hardest by such increases.

    1. Dennis,

      Thanks for the comment. I agree the governments could waste the revenue for such as unnecessary buildings or the other infrastructures. In Japan, the financial support to the juridical persons where the ex bureaucrats get their post retired positions is always too much. The mass media won't question about that as a whole.

      However, considering of the budget deficit and the big debt of the government in Japan, the taxation should be even increased. It has not been taken as a policy since the politicians have feared of the hatred of the people. We still know it is necessary. It is much better than going into the default.

      The politicians are telling lies about taxation. It will make the people disgust at the tax. They should be candid and wise enough to lead our country for the future. So far, it is not realized.