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Kibo no To puts tax hike insanity in the spotlight

9 5 9

Win or lose on Oct. 22, the energized opposition force coalescing around Tokyo Gov. Yuriko Koike is already changing the political conversation for the better in three specific ways.

One, it’s upping pressure on Prime Minister Shinzo Abe to get serious about reforms to reanimate the economy, not just rely on a weak yen and spin. Two, it’s calling the Liberal Democratic Party on its counterproductive fealty to nuclear power. Three, it’s challenging the LDP’s misguided we-must-raise-taxes mantra.

This last topic deserves far more attention than it’s gotten. Support for halting the consumption tax hike is a litmus test for joining the Tokyo governor’s Kibo no To (Party of Hope). One can hope the debate this generates ahead of the snap election highlights the lunacy of raising levies on a deflation-plagued population that hasn’t had a healthy raise in decades.

The last time Japan raised the consumption tax — to 8 percent in 2014 — the hit to gross domestic product was immediate and unmistakable. Getting growth back on track required sizable increases in monetary easing and fiscal loosening. In other words, a tax increase aimed at paying down debt required more borrowing to soften the blow. How does that work?

How little Abe’s team learned from ill-timed tax policy steps throughout history, from U.S.........

© The Japan Times