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implications of Japanese sales tax jump from 5% to 10%
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stumptowny



Joined: 29 May 2011
Posts: 245

PostPosted: Sat Aug 11, 2012 1:34 pm    Post subject: implications of Japanese sales tax jump from 5% to 10% Reply with quote

is this a non-issue for us? not sure what the significance is for me other than, do not purchase big yen items... admittedly, I need to read up more in the matter..
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Mr_Monkey



Joined: 11 Mar 2009
Posts: 661
Location: Kyuuuuuushuuuuuuu

PostPosted: Sat Aug 11, 2012 2:51 pm    Post subject: Reply with quote

Coming from the UK, where VAT was 20% before I left, I feel pretty equanimous about the whole thing.

Someone's got to pay for all the old people.
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Apsara



Joined: 20 Sep 2005
Posts: 2142
Location: Tokyo, Japan

PostPosted: Sat Aug 11, 2012 9:30 pm    Post subject: Reply with quote

I think it's pretty straightforward- basically everything, (other than your rent?) is going to cost you 5% more than it did before. A bit less available cash for other things, perhaps.
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steki47



Joined: 20 Apr 2008
Posts: 700
Location: BFE Inaka

PostPosted: Sat Aug 11, 2012 9:57 pm    Post subject: Reply with quote

stumptowny wrote:
is this a non-issue for us?


Yes, this is an issue for those of us who buy things like food in Japan.


Apsara wrote:
A bit less available cash for other things, perhaps.


Yes, we are losing some buying power. Everything will go up in price and my salary has not gone up. I am losing buying power. I will not be homeless anytime soon, but I will save a little less every month.
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Glenski



Joined: 15 Jan 2003
Posts: 12844
Location: Hokkaido, JAPAN

PostPosted: Sat Aug 11, 2012 10:50 pm    Post subject: Reply with quote

Is this an issue? Yes, of course.
How much of an issue? Depends.

Americans pay zero to 7.35% in sales tax now, I think, perhaps as high as 10% on certain items.
http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#Summary_table

For those not used to any sales tax, it must have come as a bit of a shock to pay even 5%. What will they or anyone else think about a 10% rate? As with Japan's general attitude, case by case.

Personally, I think it's unavoidable. I have lived in U.S. locations where the sales tax was 4% to 8%. Didn't really affect how I bought things. I simply looked for bargains like everyone else should anyway. Perhaps the biggest influence of this hike will be on tourism, but who knows?
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rxk22



Joined: 19 May 2010
Posts: 1247

PostPosted: Sat Aug 11, 2012 11:00 pm    Post subject: Reply with quote

Mr_Monkey wrote:
Coming from the UK, where VAT was 20% before I left, I feel pretty equanimous about the whole thing.

Someone's got to pay for all the old people.


Public pension schemes are unsustainable, and will be shown to be a horrible mistake for all countries who participated in them.

What they need to do, is to raise the retirement age in Japan, STAT
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rxk22



Joined: 19 May 2010
Posts: 1247

PostPosted: Sat Aug 11, 2012 11:01 pm    Post subject: Reply with quote

Glenski wrote:
Is this an issue? Yes, of course.
How much of an issue? Depends.

Americans pay zero to 7.35% in sales tax now, I think, perhaps as high as 10% on certain items.
http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#Summary_table

For those not used to any sales tax, it must have come as a bit of a shock to pay even 5%. What will they or anyone else think about a 10% rate? As with Japan's general attitude, case by case.

Personally, I think it's unavoidable. I have lived in U.S. locations where the sales tax was 4% to 8%. Didn't really affect how I bought things. I simply looked for bargains like everyone else should anyway. Perhaps the biggest influence of this hike will be on tourism, but who knows?


Tourism in Japan is pretty small still. The currency exchange is a much bigger factor than the tax rate.

Too bad none of this will go towards paying down Japan's crazy national debt Crying or Very sad
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G Cthulhu



Joined: 07 Feb 2003
Posts: 1348
Location: Way, way off course.

PostPosted: Sun Aug 12, 2012 2:32 am    Post subject: Reply with quote

rxk22 wrote:
Public pension schemes are unsustainable, and will be shown to be a horrible mistake for all countries who participated in them.


Utter and complete rubbish.

It all depends on how the system is organized. There are sustainable systems out there. NZ and Oz, for two.
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Rooster_2006



Joined: 24 Sep 2007
Posts: 984

PostPosted: Sun Aug 12, 2012 3:25 am    Post subject: Reply with quote

Apsara wrote:
I think it's pretty straightforward- basically everything, (other than your rent?) is going to cost you 5% more than it did before. A bit less available cash for other things, perhaps.
What about basic groceries (rice, vegetables, fish, chicken)? I know that in some countries, sales tax on groceries is lower (or non-existent) as compared to the normal sales tax rate, since everyone, including the lower class and working class, has to buy groceries.

If it doesn't affect basic groceries, then I'm totally on board with this.

Otherwise...aren't basic groceries expensive enough as it is?

I mean, I'm all on board with finding new sources of revenue to keep the pension system alive... I'm not a big fan of dumping old people in Aokigahara or garotting them like the Hudson Indians... But surely groceries are already expensive enough? Particularly rice... Seriously, in the US, rice costs 1/10th or less of what it costs in Japan...

I can afford a 5% hike. I bank well in excess of 100,000 yen per month after living expenses and taxes. However, for a lower class or working class person making 2,000,000 yen or less per year, man, this is going to hurt.
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rxk22



Joined: 19 May 2010
Posts: 1247

PostPosted: Sun Aug 12, 2012 4:11 am    Post subject: Reply with quote

G Cthulhu wrote:
rxk22 wrote:
Public pension schemes are unsustainable, and will be shown to be a horrible mistake for all countries who participated in them.


Utter and complete rubbish.

It all depends on how the system is organized. There are sustainable systems out there. NZ and Oz, for two.


I said public pensions, not 401k's. Which is basically what Oz's is.

As things stand now, Japan's is fixed income aka traditional pension. Which is based on insanity, as well as it being open to pillaging from the politicians.
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rxk22



Joined: 19 May 2010
Posts: 1247

PostPosted: Sun Aug 12, 2012 4:27 am    Post subject: Reply with quote

Rooster_2006 wrote:
Apsara wrote:
I think it's pretty straightforward- basically everything, (other than your rent?) is going to cost you 5% more than it did before. A bit less available cash for other things, perhaps.
What about basic groceries (rice, vegetables, fish, chicken)? I know that in some countries, sales tax on groceries is lower (or non-existent) as compared to the normal sales tax rate, since everyone, including the lower class and working class, has to buy groceries.

If it doesn't affect basic groceries, then I'm totally on board with this.

Otherwise...aren't basic groceries expensive enough as it is?

I mean, I'm all on board with finding new sources of revenue to keep the pension system alive... I'm not a big fan of dumping old people in Aokigahara or garotting them like the Hudson Indians... But surely groceries are already expensive enough? Particularly rice... Seriously, in the US, rice costs 1/10th or less of what it costs in Japan...

I can afford a 5% hike. I bank well in excess of 100,000 yen per month after living expenses and taxes. However, for a lower class or working class person making 2,000,000 yen or less per year, man, this is going to hurt.


They need to end subsidies. Instead, to encourage domestic production of agriculture have higher tariffs, and perhaps quotas. As it is now, Japan is really encouraging small and inefficient food stuffs production.

Too many small holders who, I believe get subsidized enough so that they can afford machinery. Ideally, we need to have more medium sized farms, which for mechanization is necessary.

Edit, here is a nice article about Japan and it's farming practices http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1225586815566&lang=eng
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Rooster_2006



Joined: 24 Sep 2007
Posts: 984

PostPosted: Sun Aug 12, 2012 5:09 am    Post subject: Reply with quote

rxk22 wrote:
Rooster_2006 wrote:
Apsara wrote:
I think it's pretty straightforward- basically everything, (other than your rent?) is going to cost you 5% more than it did before. A bit less available cash for other things, perhaps.
What about basic groceries (rice, vegetables, fish, chicken)? I know that in some countries, sales tax on groceries is lower (or non-existent) as compared to the normal sales tax rate, since everyone, including the lower class and working class, has to buy groceries.

If it doesn't affect basic groceries, then I'm totally on board with this.

Otherwise...aren't basic groceries expensive enough as it is?

I mean, I'm all on board with finding new sources of revenue to keep the pension system alive... I'm not a big fan of dumping old people in Aokigahara or garotting them like the Hudson Indians... But surely groceries are already expensive enough? Particularly rice... Seriously, in the US, rice costs 1/10th or less of what it costs in Japan...

I can afford a 5% hike. I bank well in excess of 100,000 yen per month after living expenses and taxes. However, for a lower class or working class person making 2,000,000 yen or less per year, man, this is going to hurt.


They need to end subsidies. Instead, to encourage domestic production of agriculture have higher tariffs, and perhaps quotas. As it is now, Japan is really encouraging small and inefficient food stuffs production.

Too many small holders who, I believe get subsidized enough so that they can afford machinery. Ideally, we need to have more medium sized farms, which for mechanization is necessary.

Edit, here is a nice article about Japan and it's farming practices http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1225586815566&lang=eng
Yep, that's precisely what my dad (who worked at the US Department of Agriculture for 30 years) has told me again and again, especially after doing negotiations with the Japanese (and Koreans, who do basically the same thing).
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Mr_Monkey



Joined: 11 Mar 2009
Posts: 661
Location: Kyuuuuuushuuuuuuu

PostPosted: Sun Aug 12, 2012 11:58 am    Post subject: Reply with quote

rxk22 wrote:
Public pension schemes are unsustainable, and will be shown to be a horrible mistake for all countries who participated in them.

What they need to do, is to raise the retirement age in Japan, STAT
Why are Americans so fond of predicting impending DOOM when the world isn't organised in the same way as their knee-jerk reactionary worldview?

If there's anything demonstrably based on insanity, it's the US political economy and its way of funneling money into corporations in the name of the public good.

The only problem is when US banks require bailouts because of their irresponsibility, it affects, among others, the value of my mother's private pension fund.

Trust me mate, you're talking out your arse.
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Pitarou



Joined: 16 Nov 2009
Posts: 1046
Location: Narita, Japan

PostPosted: Sun Aug 12, 2012 1:59 pm    Post subject: Reply with quote

Mr_Monkey wrote:
rxk22 wrote:
Public pension schemes are unsustainable...
Trust me mate, you're talking out your arse.
This is going way off topic, which is not a problem itself, but I really don't want to read an ill-informed about economics debate here. I had enough of that in my economics degree.

And, to answer stumptowny's question:

Stuff will be dearer. People will be a bit poorer. Economic growth will be impaired. On the upside, a looming debt crisis that will, if unchecked, lead to the yen being devalued may have been averted.
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Mr_Monkey



Joined: 11 Mar 2009
Posts: 661
Location: Kyuuuuuushuuuuuuu

PostPosted: Sun Aug 12, 2012 6:42 pm    Post subject: Reply with quote

Pitarou wrote:
This is going way off topic, which is not a problem itself, but I really don't want to read an ill-informed about economics debate here. I had enough of that in my economics degree.
Whoo hoo... You did a BSc in economics.
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