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Soriek  6mo ago (text post)   950 thread views

Transnational Thursdays 23

This is a weekly thread for people to discuss international news, foreign policy or IR history. I usually start off with coverage of some current events from a mix of countries I follow personally and countries I think the forum might be interested in. I’m increasingly doing more coverage of countries we’re likely to have a userbase living in, or just that I think our userbase would be more interested in. This does mean going a little outside of my comfort zone and I’ll probably make mistakes, so chime in where you see any. Feel free as well to drop in with coverage of countries you’re interested in, talk about ongoing dynamics like the wars in Israel or Ukraine, or even just whatever you’re reading.

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Japan

Despite a resurgent quarter, the economy remains stubborn and the IMF projects that Germany will overtake Japan as number 3 in global nominal GDP rankings. Prime Minister Kishida has now released a fiscal stimulus plan involving:

cutting income tax burdens by ¥40,000 ($268) a year while giving ¥70,000 to low-income and elderly households as part of inflation-relief measures.

Japan’s largest opposition party, the center left Constitutional Democratic Party, has been the main source of criticism:

“The ruling parties have been calling for the return of increased tax revenues of ¥15 trillion, preferably ¥20 trillion, in scale. Would this (cut) be for one year only? Is it a permanent measure, and are the wealthy also eligible for an (income) tax cut?” Izumi [leader of the CDP] asked…

Kishida and Izumi also clashed over the issue of a consumption tax refund. The CDP is calling for legislation that will return a portion of the consumption tax bill to those in middle- and lower-income brackets. However, Kishida said the current system directly reduces the consumption tax burden on consumers of a wide variety of daily products, and that the CDP plan wouldn't make consumers feel that the consumption tax burden has been eased…

Izumi also pushed the government to speed up plans to boost the minimum wage in order to compete with labor markets elsewhere, such as in the U.K., France and Australia, for example. Otherwise, he said, Japan’s workers may leave the country in search of higher wages. The government’s current plan calls for increasing the minimum wage to ¥1,500 per hour by the mid-2030s.

Kishida replied by saying he was worried about wage increases not keeping pace with rising prices and how, if left unchecked, deflation would return. He said only that the government would work on closing the wage-price gap as quickly as possible. He promised to return the benefits to the public, but did not offer a timetable for doing so.

Taxes changes are a little sensitive for the ruling party; the LDP spent years under Abe agonizing over raising the sales tax, and they’re torn, then as now, between fretting about not funding their colossal debt on the one hand and wanting to stimulate their stagnant economy on the other. Even some members of Kishida’s coalition have balked at the cuts, so we’ll see if anything comes of it.

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