Sales tax headed for 18%
Posted by Matt Dioguardi on May 20th, 2008
According the Yomiuri:
A government panel said Monday the consumption tax rate would have to be raised from the current 5 percent to between 9.5 percent and 18 percent if a fully tax-funded system is employed to finance the basic pension as part of envisaged reforms.
Okay. Let’s think about this. Pension funds are underfunded. Why? Well, aside from the facts that the record-keeping is incredibly inept, the pension calculations were probably poorly done. People are living longer than expected, inflation is increasing the cost of living, etc.
So what’s to be done? Raise the sales tax. But what sense does that make? If you’re a foreigner you might not even be part of the pension program, so why should 15% of the money you spend in Japan have to pay for pension funds?
Moreover, the sales tax hits the poor hardest, but who gets more benefits from the pension program. Right, the rich because they pay more into it. So this is a rob the poor to give to the rich strategy, isn’t it?
This is mind boggling.
Of course, there’s the *conservative* Yomiuri arguing that, gosh we can probably get by with an increase to only 7%. Either way, it sounds like extortion to me.