Increasing the sales tax in Japan

- Why does the Japanese government intend to increase the sales tax and what will happen if it is raised? –


Before the Lower House election in 2010, Prime Minister Naoto Kan, the Democratic Party of Japan (DPJ), announced to raise the 5 percent sales tax to 10 percent. Although this proposal was previously suggested by the Liberal Democratic Party (LDP) which is the main opposition force, Kan’s remarks had an effect on public opinion. As a result, DPJ drastically lose the number of seats and suffered a severe defeat in the election. Thus, the public always pay attention to reform the tax system and discuss the pros and cons of the tax hike plan, because it directly affects all our livings.


Regarding the sales tax, how much do you know about it? Japanese sales tax is imposed on certain transactions at the flat rate of 5 percent (4 percent for national and 1 percent for local tax). The current sales revenue accounts for about 10 trillion yen as the financial resources, which is the third largest tax revenue following income and corporate taxes. However, why does the Japanese government intend to increase sales tax now? In this matter, there are several reasons to increase in tax revenue.


First, it is said that Japan has national debts about 900 trillion yen in 2009. Although these debts are used for social security cost, the deficit is estimated more than 180% of GDP. This can not make a simple comparison, but it may be no exaggeration to say that Japan face a financial crisis like Greek. Under these circumstances, the lawmakers consider a raise in sales tax because they expect into be a generally stable source of revenue. If the plan succeeded, the tax revenue will estimate roughly about 2.5 trillion yen by 1 percent increase. Therefore, if the 5 percent consumption tax is raised to 10 percent, 12.5 trillion in total will be possible to reduce from the debts. Secondly, the purpose of this tax increasing is not only to redeem national bonds, but also to fund for social security. According to The Ministry of Economy, Trade and Industry, Japan has to strengthen the industries in medical, nursing and child-care fields for the sake of the nation's future, therefore, it is said that Japan should increase the number of employee in these fields for tackling deflation. Consequently, Japanese will be able to make money by being employed as well as paying the raised tax.
Finally, the current Japanese sales tax is very low compared to other countries. For example, in Northern Europe such as Demark, Sweden, and Norway, the VAT is 25%. Since the tax is high, they do not pay for any social security services like medical care or school fee. In addition, because of well-financed pension system (not like Japan), they don’t need to worry about their old age.

However, there is a lot of opposing opinions on the tax hike. What will happen if the sales tax rate is raised to 10 percent and what will be the effects of that?


First of all, Japanese current sales tax is said to be a regressive taxation, which means that low income families pay a greater share of their income in sales taxes than families with high incomes. Even though Prime Minister Kan insisted on any rise in the sales tax must be accompanied by lower tax rates for daily goods like Europe’s VAT system and refunds for low income families, they must feel under the burden of taxation. As a result, it will seriously widen economic disparities. In addition, if Japanese government intends to deduct the other taxes such as corporate or income taxes while the sales tax is raised, the total revenue will not increase. Likewise, the increased revenue will be offset by any refunds, which Prime Minister Kan strongly proposes. Therefore, it may be difficult to expect such revenue increases. Lastly, some analysts point out that the higher sales tax could dampen recovery. After changing the tax rate from 3 percent to 5 percent in 1997, it has actually caused deep deflation. As there are a lot of economic problems with tax increases, the allocation of sales tax revenues should be discussed before launching.

To sum up, it is not easy for the government to put for increasing in consumption tax. Not only does the DPJ need to gain consensus with other parties, but also DPJ should explain the details of their plan to the public.


In my opinion, the sales tax increase may be inevitable matter if we think about our future life. As far as I’m concerned, the government should also keep cutting in expenditures through a budget screening ”SHIWAKE” or other activities to cut wasteful spending.


 

My miserable trip to NY

It is said that everyone has memorable events and experiences in their life. Especially, a travel often makes wonderful memories, because we can get away from our everyday life. On the other hand, a travel has also an opposite effect to frustrate or disappoint us when unexpected things happen. In my case, I have a miserable memory when I travelled to NY.

It was my first trip by myself. Everything ran smoothly before arriving at the NY airport. What happed was I lost my baggage. In fact, my baggage was wrongly loaded to somewhere else during the connecting flight, and was not delivered to NY. Although I know these troubles often happen, I never imagined that this would happen to me, especially, it was my first trip alone!! Afterwards, this incident ruined all my travel plans.

First, I had to buy some extra clothes and necessary items, such as toilet kit etc. Therefore, I spent money for the things that I didn't plan for.

In addition, I called almost everyday the airline office to find out my baggage during the trip. That made me annoyed because I had to explain my situation every single time when I called there. Especially it was a nightmare when the agent was unkind to non-native English speakers.

Furthermore, my lost baggage was not delivered to NY, and I finally received it at Kansai airport when I returned to Japan. Consequently, my stuff prepared for the trip didn’t work at all.

That’s my unforgettable trip. I felt very miserable during the trip without my clothes but it was at least a good experience to negotiate patiently with the agents in English.

Gender equality

In Japan, some people still believe that husbands should work outside while wives do housework at home. However, as we know, this stereotype of family is now changing. Particularly, young generation seems to have a different idea about gender roles. I would therefore describe the details about gender equality in Japan and look at the present situation as follows.

According to the survey by the Cabinet Office, the percentage of women in leadership position is still low and does not meet a target of 30% in each industry (*Refer to the following graph). In addition, Gender Empowerment Measurement (GEM), which indicates the rate of women's participation in Economy or Politics, is ranked 57th in 109 countries.

                                       http://www.gender.go.jp/whitepaper/h22/gaiyou/html/honpen/b1_s00.html

Baseed on these results, what should we do in order to promote this situation?
First of all, we have to build a supportive society that women can work after childbirth. In fact, about 60 percent of working mothers quit their jobs before and after childbirth.

Moreover, the working environment of women should be further improved, even though Basic Law for a Gender-equal Society has been implemented. For instance, trainings for employee, salary or promotion must be equal to men.

Lastly, women themselves need to change their way of thinking about working. Women have to believe their abilities and try to become more active outside the home.

To sum up, despite the fact that the number of working women are increasing, it seems that gender equality hasn’t yet become reality. Therefore, not only government but also ourselves try to rethink the current situation and act for further improvement.

Why should the Japanese study English?

English is taught in Japan as a compulsory subject from junior high school. And it has decided to be a subject in elementary school for 5th and 6th grade students from 2011. But why should the Japanese study it? It is generally believed that English is a very useful language and spoken worldwide.

As we know, English is widely used as a common language in the world. For instance, we will see English in public places such as at stations, airports and hotels etc. In addition, English also occupies a high share on the internet. Therefore, when we want to obtain some exact information, it is necessary for us to understand it.

Moreover, it is said that English ability maybe guarantees a better job. According to the survey, about 67% of people answered that English skill is practical for their career development. Nowadays, Japanese business has been expanded worldwide. That is why some Japanese are so obsessed with learning it.

Finally, English is used in order to know/understand other cultures. If we can enough communicate in English, we will make foreign friends as well as discuss the matters with them equally.

As stated above, each person has a different purpose for studying English. However, acquiring English will make it possible to broaden our horizons and help us at anywhere and anytime in the world. Thus, we should study it.

Long queue

During the Golden Week holidays, I can imagine every place was crowded and there were long queues everywhere. Recently, as being in the news, the Shanghai Expo is the place that attracts large crowds, because the visitors have to wait for at least 2-3 hours to enter each pavilion. But don’t you mind standing and waiting in line for long hours?

In this matter, some people believe that it comes from one’s national characteristic. First of all, Japanese tend to judge the things’ quality or reputation through the long queue. For instance, 行列のできる店、人気のスポット so on. Also, in order to get special things or visit popular places, some Japanese never feel wasting their times. According to the social psychological viewpoint, it is called “Conforming behavior（同調の行動）”　In addition, Japanese try to keep up with the new trend or others’ reputation.

However, in some countries, people detest or do not get used to stand in long lines because of their cultures or manners. Therefore, they seem not to be influenced by others or by the popularity through a long line.

Anyway, do you mind queuing or not? Although I hate standing in long lines especially crowded places such as amusement parks, I don’t mind waiting in front of my interesting sweets shops. Therefore, as far as I’m concerned, it depends on how much we are satisfied with doing it.

Things I recently queued for…

Mamemochi, Demachi-Futaba, KYOTO

Dojima-roll, Mon-chouchou, OSAKA

Budget screening

Since the Democratic Party of Japan (DPJ) took over the governments as the Diet, a budget screening has been carried out for cutting wasteful spending. Last week, the Government Revitalization Units started the second round of discussion to screen state-funded programs.

According to polls, about 80% of Japanese are in favor of the budget screening, because the problems such as Amakudari, or the cozy relationships among Independent administrative institutions are visualized. In addition, we can monitor the proceedings through the media, or even observe it at the site. If the panel judge whether the programs should either be abolished, or have their budgets reduced, it is possible to lead to the practical budget cut.

However, others including school officials or some media are criticized its massive cut. DAILY YOMIURI says “medium- and long-term strategic perspectives are most important and should never take a backseat to a short-term cost-effusiveness view." Also, this budget screening is said to be a political performance of DPJ, because it’s public support is currently declining.

Although this budget screening is debated the pros and cons, I think it may be a good change to attract public attention to the budget spending.

Soul Food

What kind of dish do you know about Korean cuisine? Perhaps, most Japanese will associate it with “Yakiniku,” Korean-style of grilled beef. However, Koreans also eat a lot of vegetables at the same time. This is because they can take vegetables from various kinds of Kimchi. Kimchi is a soul food for Korean.



First of all, Kimchi is pickled or fermented vegetables and the name means pickles in Korean. This national dish is served at every Korean meal. Kimchi can be made from different kinds of vegetables like Chinese cabbage, cucumbers, radishes etc. Some varieties are aged for hours, other are for years. In addition, Kimuch is said to have many health benefits including antibiotics properties, neutralizing stomach acid, and prevention of high blood pressure.

In terms of the annual consumption, it is said to be about 30 kg per person. Why they can eat such the amount of Kimchi? I suppose it is possible to arrange as a basic seasoning. For instance, Kimchi-based soup or hot pot, even stir-fled rice or pork with Kimchi.


On the other hand, according to Korea Times, about 65% of young people don’t know how to make Kimchi. Furthermore, Chinese Kimchi is recently increasing in the market. Despite these current circumstances, Kimchi is necessary item for Korean and essential for Korean cuisine.