Japan Government to Propose New Tax Rate
For too many middle class Japanese, consumption definitely spells trouble.Finally, the Japanese government and the ruling Democrats are cooking up a significantly big consumption tax for the future. The resulting amount of money can just about pay for social security and fund the deficit.
The increase in the consumption tax pitch is multifaceted. First, the move is regarded as being a part of reform that would help with reconstruction and rebuilding the nation from the recent nuclear disaster. Second, it is expected to give low-income households some relief given that the government and the ruling party has plans on offering cash handouts or tax waivers in some instances.
According to the terms of the draft plan, the increase in tax is likely to happen in stages and pile up into almost double the current tax rate by the middle of the decade. This means consumers who are paying the 5 percent tax will have to fork over 8 percent in October 2013 for the privilege of being a resident, and up to 10 percent at the end of April 2015. An outrageous rate, but at least those who incur it have to do so while taking the advantage of all valuable services the government has promised to offer.
The ruling party, however, are concerned with the low-income families as they do not want them to fall into unmanageable debt, neither do they like to see them getting sidelined by the economy whatsoever. The draft plan is also said to be focused on including economic data, such as growth rate, to determine its effect on the tax increase. The plan, although not openly available for public perusal, continues to refine rules and regulations, fix mistakes and is expected to be finalized by the end of the year. For all other federal income taxes and corporate related taxes already on the books, advocates say more is yet to come.
Even so, some Democratic legislators and several former cabinet ministers want to go against the tax hike by collecting signatures and make it easy for consumers to spend. To them, consumption tax increase apparently isn't making good economic sense.