Japan Press Weekly

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2014 March 26 - April 1 [ECONOMY]

Sales tax hike will plunge more people into poverty

As more and more people have been impoverished, the Abe government is about to increase the consumption tax rate from the current 5% to 8% in April. The amount of revenue increase is estimated to reach eight trillion yen a year.

The sales tax rate was raised from 3% to 5% in 1997. In the past 17 years, a lot of people have slid into poverty.

The percentage of non-regular employees of all workers went up from 23.2% in 1997 to 37.6% in January 2014. Now over one-third of all employees in Japan are non-regular workers.

The number of workers called “the working poor”, whose annual income falls short of two million yen, increased by 2.76 million to 10.9 million.

The proportion of households who have no savings tripled from 10.2% in 1997 to a record high of 31% last year.

The average annual income of workers decreased by about 700,000 yen in the same time period, from 4.46 million yen to 3.77 million yen.

In contrast, large corporations have become ever more prosperous.

The amount of annual profits of big businesses capitalized at one billion yen or more swelled from 15 trillion yen in fiscal 1997 to 26 trillion yen in fiscal 2012. The amount of their internal reserves nearly doubled from 140 trillion yen to 272 trillion yen.

While the consumption tax rate was raised, the corporate tax rate has gradually gone down. It has been lowered from 37.5% in 1997 to the present 25.5%. Accordingly, the amount of corporate tax revenues decreased by more than three trillion yen to 10.1 trillion yen. The Abe Cabinet intends to further cut the corporate tax rate.

The need now is for citizens to strengthen the movement to end the government economic policy serving only major companies.

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The Abe administration has spent as much as 1.26 billion yen in taxpayers’ money on government publicity to persuade the general public to accept the consumption tax hike scheduled for April, revealed Japanese Communist Party lawmaker Sasaki Kensho.

According to Sasaki’s investigation, the government has been circulating misleading information claiming that “all sales tax revenues will be used to improve social security programs”, in commercials on TV and radio, advertisements in newspapers and magazines, and on web banners.

“It’s absolutely unacceptable for the state to use taxpayers’ money to push the sales tax increase on the people. The government should immediately put a halt to the tax hike and use public funds for public welfare,” Sasaki stressed.

Past related article:
> Consumption tax hike will destroy economy and finance: JCP Yamashita [January 31, 2014]