Consumption Tax Hike May Be Only Solution For Japan

The Coalition parties in Japan have been informed by Prime Minister Taro Aso to create a proposal for changing the current tax system with posibility of rises in consumption taxes. The largest source of financial expenditures is the increasing social security expenses, the rise of the consumption taxes may be the only way to cover funding for these types of programs.

Although in the midst of voting for the House of Representatives, many party members have agreed with the financial implications in the rise of consumption taxes.

The taxation plan would need to be thoroughly outlined and clear. The taxation plan would include a reduction of 2 trillion as well as large cuts in expressway tolls.

The proposal would also include breaks for home buyers including the largest income tax deduction ever, which could reduce tax revenus by more than 2 trillion a year.

The resulting decline of the corporate tax revenues due would slowdown the economy, with an expectation of 2 3 trillion during fiscal year 2007.