Japanese Voters Send Anti-Tax Signal

Elections in Japan do not have much ideological or philosophical content, but the recent defeat for the Prime Minister’s party in upper-house elections was a clear sign that voters do not want higher taxes. As reported by Tax-news.com, Prime Minister Abe has been advocating a big hike in the value-added tax to finance more transfer spending, but the election results mean that Japanese voters may be spared this irresponsible outcome. The one distasteful element of the story is that the reporter refers to Abe’s commitment to reform. In the real world, raising taxes to finance more spending is a way of dodging reform:

Japanese Prime Minister Shinzo Abe’s plans for fiscal and tax reform have been dealt a blow after the opposition Democratic Party, which opposes a hike in consumption tax, won a substantial majority in Upper House parliamentary elections on Sunday. While the Democrat Party’s victory does not give it control over the government, analysts expect their influence in the upper house to raise a barrier to an early rise in consumption tax - thought to be central to the ruling Liberal Democrat’s plans to raise the revenue it needs to meet growing spending requirements and balance the budget. It was thought the government would legislate to increase the tax in 2008, with the hike going into effect in 2009, but this is now an increasingly distant prospect. … However, despite the electoral setback, Abe resolved to forge ahead with fiscal reforms.