From our other sites
The story
A widely reported estimate claims that even if the consumption tax is cut, a 3% rise in prices would increase overall household spending by ¥60,000–70,000, resulting in a net “loss” — sparking debate on 5ch’s News Express+ board. The original article took a cautious stance on tax cuts, citing concerns about worsening fiscal health and an accelerating weak yen, but commenters on the thread pushed back repeatedly, arguing that not cutting the tax would make the burden even heavier. The discussion spread from the tax rate itself to broader price-control measures, touching on rampant “tax-cut-excuse” price hikes, fears of a rebound in prices once the two-year temporary measure ends, and the merits of alternatives like wage increases or a refundable tax credit.
Are Consumption Tax Cuts and Free Healthcare Really a “Good Deal”? The Small Gains and Big Losses Hidden Behind Short-Term Benefits
(…)
Tax cuts worsen the nation’s fiscal health, directly undermining confidence in the Japanese government. If that confidence wavers, foreign investors will sell off the yen, further accelerating its depreciation.
Source: news.yahoo.co.jp / Original article here
What people said
Exactly. Let's stop with the disingenuous arguments.
Everyone's using it as an excuse to jack up prices lol
Just hand out cash instead lol, straight into our My Number (national ID) bank accounts lol
It'd make sense if the tax cut were permanent, or if prices actually dropped during those 2 years, but once it ends things will just snap back and feel like a massive price hike. Are you stupid?
That's still better than prices rising 3% with no tax cut at all. This article is just plain stupid.
This article just wants to bash the tax cut, that's all.
So I guess if they raised the tax on things like newspapers to 10% (they currently enjoy the reduced 8% rate), that'd fix part of it lol
Probably because cutting the consumption tax could accelerate yen depreciation, right? And that would push up raw material costs themselves.
Well sure, some stores might do that, but wouldn't customers just flock to the cheaper ones?
There's also a chance everyone just colludes cartel-style and nobody lowers prices.
Raw materials, shipping, and labor costs (minimum wage, etc.)
really have gone up, and that's
true whether you're a big corporation or a small business.
For a cartel to actually work, don't the companies involved need to be an oligopoly first? Seems hard otherwise.
Go ahead and try, if you think you can beat Don Quijote and AEON (discount retail chains), who'll slash prices even if it means cutting quality.
For big companies, the trend is more toward merging and pushing efficiency.
Mid-sized stores that can't streamline at either a small or large scale might just end up failing with no good moves left.
In 2 years prices are gonna shoot up like crazy.
That's when the refundable tax credit system is supposed to kick in, after those 2 years.
Why go through all that hassle lol
Just keep it at 0% forever.
It'd be negligible anyway.
The chance to buy at 10% off only lasts for these 2 years.
When you're talking tens of millions of yen, that 10% is huge.
Sorry, I have absolutely no idea what you're talking about.
Then prices go up first.
Cutting wages would bring prices down, so hurry up and cut wages already \(^o^)/
The only people I can picture profiting are old folks currently collecting their employee pension.
The consumption tax is the one tax you can actually collect from wealthy old people, so maybe it's better not to lower it.
Taxing financial assets makes more sense. In a globalized society, you can't measure real wealth by age or income alone.
↓
Ordinary people end up with more money (same effect as subsidies or monetary easing)
↓
Prices rise
That's just a lame excuse cooked up by people who don't want tax cuts.
＞that's a ¥60,000–70,000 increase in spending, a "loss"
Compared to prices rising 3% with no tax cut at all,
isn't that actually better?
Are they hiring people without enough brains at the broadcasting station lol
If the consumption tax goes down, prices just go up even more.
The consumption tax is designed to collect more from people who spend more, so cutting it just inevitably leaves ordinary people worse off.
Workers are the ones who actually bear a sales tax, since it's never deducted from labor costs.
Part of why the economy is stagnant is that rich people aren't spending. Going forward we need to collect more tax from money games (speculative financial trading) instead.
Background and Key Points of Debate
The estimate that “even with a tax cut, rising prices cancel out the benefit, resulting in a loss” depends heavily on what you assume prices would do if the tax weren’t cut at all. The thread split over exactly that assumption: some saw the article’s “¥60,000–70,000 increase in spending” as proof the tax cut fails, while others argued the burden would have been even heavier without it. Other points raised included the fact that the tax cut is a time-limited measure likely to trigger a price rebound once it expires, mixed opinions on a proposed shift to a refundable tax credit, and the view that price hikes are happening regardless of the tax cut — all of which resist a simple loss-versus-gain calculation. It’s worth noting that the “¥60,000–70,000” figure in the article is only an estimate of the added burden from rising prices, not a final picture of the net effect on household finances once the tax cut’s relief is factored in.
※This article is compiled from excerpts and a summary of the 5ch (News Express+) thread “[Breaking] It’s been found that even if the consumption tax is cut, a 3% rise in prices would mean a ¥60,000–70,000 increase in household spending overall, resulting in a “loss”.”
Leave a Reply