The International Monetary Fund is urging higher taxes in Japan, though this is not exactly newsworthy since the IMF routinely endorses higher taxes in its country reports (Article IV consultations). To be fair, the IMF does say that it would be a good idea to control spending. And the international bureaucracy wants taxes to be raised in a less‐destructive manner. Nonetheless, the notion that Japan will be more prosperous with a higher tax burden (which would be used to finance a bigger government) is rather fanciful. Tax-news.com reports:
The International Monetary Fund (IMF) last week published the conclusions reached by its assessment team during the recently completed Article IV consultation with Japan. …The Article IV report continued: “Most Directors considered that given the size of the task at hand, additional revenue measures will be needed, including for base broadening. They indicated that revenue measures could be best identified in the context of a broad reform of the tax system that addresses the challenges posed by Japan’s aging society and globalization. Among possible measures, increasing the consumption tax has the benefit of being less detrimental to growth and equitable across generations. Some Directors, however, viewed the authorities’ focus on expenditure adjustments as broadly appropriate at this juncture.”
This story, which is so similar to hundreds of other reports on IMF‐endorsed tax hikes, raises an interesting question: Does anybody know if the IMF has ever recommended that a country reduce its tax burden?