The Cabinet decided on February 17, 2012 that the consumption tax will be raised according to the principles that the government and opposition parties drafted in January. The aim is to reform the nation’s finances for the social security system. CUJ submitted the following letter to Prime Minister Noda on February 16, demanding a number of improvements to the proposal.

To:
Prime Minister Noda Yoshihiko
February 16, 2012

Please reexamine the increase of the consumption tax rate

CUJ strongly requests that the government’s policy of “first raising the consumption tax” should be fundamentally reexamined.

According to the proposed reform bill, the consumption tax will gradually be raised to 8% From April 4, 2014 and to 10% from October 1, 2015. The aim is to ensure a stable source of income for the social security system and at the same time achieve healthier public finances.

The plan is to obtain people’s understanding by regarding the raise of the consumption tax as a tax that is earmarked for social security. The four main areas of expenditures are the costs for the pension system, health care & medical treatment, social security, and the decrease in the birthrate. Although this may be carried out, we suspect that the true aim of the raising of the consumption tax rate is to use the funds as a stopgap measure to deal with the huge budget deficit. Continue reading No Consumption Tax Raise Without Real Reform →