The Democratic Party of Japan on April 7 decided to propose an increase in the consumption tax rate to eight percent from the present five percent in order to establish a "program to guarantee minimum pension benefits".
The DPJ explained that its bill calls for pension premiums in proportion to individual income to reduce the sense of unfairness.
However, a "consumption tax" to help finance a "program to guarantee minimum pension benefits" will be an inequitable tax system imposing heavier burdens on lower-income earners, Akahata on April 8 pointed out.
A rise in the tax rate to eight percent means that the people will have to shoulder another 7.5 trillion yen burden.
Small- and- medium-sized businesses, unlike larger corporations, will be reluctant to pass a higher tax rate along to the price of goods or services.
The DPJ, before submitting the bill to the Diet, visited the Japan Business Federation (Keidanren) and was told that the business circles would expect further increases in the consumption tax rate to make up for shortages of the pension fund when needed.
Thus, there is no guarantee that a rate-hike would be limited to three percent, said Akahata. (end)
