Tuesday, April 14, 2009

Raise consumption tax rate?

Should consumption tax rate be raised?

I agree with raising the Japanese consumption tax rate.
Right now, the consumption tax rate (Goods and Service Tax in the U.S.) in Japan is 5%, which is very low compared to most developed countries.
I think Japan should raise the consumption tax rate and use it to social security expense. For example, Sweden and Norway's consumption tax rate is 25%; most of it goes to social security expense, which is used for medical care or public hygiene.
Additionally, these countries' medical care is really substantial.

Some people say income tax and corporation tax should be used for social security, but I think it's unfair to pump much tax from people who are working hard.
Japan is one of the aging society with less number of child birth. To cover the less number of workforce, we should do something to get tax from all the people.

However, I suppose we should have one condition as raising consumption tax rate:we need remedies for low-income group.
There are two ideas; first, refund the tax to them. Second, establish different tax rates depends on the expense. For example, we can keep 5% of the consumption tax rate for food, medical care, and education expense because everybody needs those.
We can have the higher tax rate when we disburse the other thing.

In conclusion, I'm in favor of raising consumption tax rate if there are some policies for low-income group.

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