（ps hamada是Abe 内阁经济政策的key 参谋。可是9月数据出来后，似乎官邸更佳偏向ito 的意见，我们拭目以待吧）
2013/09/16 THE NIKKEI WEEKLY 25ページ 105ワード
Two professors, two tax perspectives
Prime Minister Shinzo Abe is to make a final decision by early October on whether to raise the consumption tax as planned. A law enacted last year calls for the 5% levy to be hiked to 8% next April, and then to 10% in October 2015. The Nikkei asked two economists for their views – and received two quite different responses.
Takatoshi Ito, a professor at the University of Tokyo, believes the government should stick to the plan. But Koichi Hamada, a Yale University professor emeritus, argues for postponing the hike by a year or raising the rate by one percentage point at a time.
If the government postpones the tax hike by a year, wouldn’t the market react negatively?
Those who have high hopes for fiscal restoration would be disappointed. I acknowledge that Japan’s huge debt is a problem. But Japan also has huge financial and other assets. The ministry of Finance’s alarm over Japanese government bonds is excessive. I don’t think a one-day delay will cause a big stir.
Tax hike proponents cite the need to maintain market confidence. If Abe agrees with them, he will go ahead with the plan. But I’m concerned the tax hike will deal a blow to personal spending and production and suppress overall demand.
Bank of Japan Gov. Haruhiko Kuroda is also calling for the government to abide by the original schedule. He is an excellent person, but it’s pity if he supports the tax increase as a former MOF official.
Some people express concern that the BOJ’s monetary easing could be seen as an effort to shoulder part of the government’s debt. I don’t think we need to worry at this moment.
Q: some are calling for a supplementary budget to stimulate the economy.
That’s absolute nonsense. The consumption tax hike is intended to boost state revenue. Fiscal rehabilitation is impossible if the government collects tax with one hand and spends the money with the other. It’s more understandable if the government and BOJ use monetary easing to soften the negative impact of the higher tax.
Q：How should the government tackle its huge fiscal deficit?
I’m not saying the tax increase is unnecessary. It must be done even with a one-year delay. The government should not give the impression that it is unwilling to work to reconstruct state finances.
Countries and regions are competing to attract business by cutting corporate taxes. Japan has no choice but to join the trend, which means it will become more reliant on the consumption and other indirect taxes. Raising the consumption tax to 10% is the first step for fiscal rehabilitation; further tax increases may be unavoidable.
With economy on right track, now is the time for HIKE.
Q: Some are urging the government to postpone the tax increase or revise the two-phrase plan.
A: New laws would be needed to adopt alternative plans, and going through that process would take a lot of time and energy. The forthcoming extraordinary Diet session would have to focus on the consumption tax rather than the growth strategy. It would force the government to hold off on firing the “third arrow” of its economic program.
The financial market could become unstable while parliament deliberates alternatives.
Overseas investors might grow disappointed with Abenomics and unwind their positions in Japan. It would result in falling share prices and a stronger yen, curbing the positive effects of quantitative easing.
Q：Won’t the consumption tax increase hinder Japan’s exit from deflation?
A: If the economy continues to recover, the supply-demand gap will narrow, inflationary expectations will rise and prices will start to climb. The tax hike may delay the timing of achieving the BOJ’s goal of 2% annual inflation. But I don’t think it will prevent Japan from overcoming deflation.
BOJ Gov. Kuroda will be in a difficult position if criticism grows that the central bank is financing the fiscal deficit by buying up JGBs. The bank will be able to purchase the bonds without worry once the government embarks on fiscal rehabilitation. The consumption tax increase is important to give the BOJ more leeway for easing.
Will a supplementary budget be necessary to ease the impact of the tax increase?
A: A correction from last-minute demand is like in the April-June period of next year. The government will be able to largely reduce the swoon by spreading more during this quarter. An extra budget of about 2 trillion (JP Yen), mainly to repair infrastructure, would be sufficient.
It the government is concerned, it should scrap the temporary surtax- imposed on business between fiscal 2012 and 2014 to fund post-disaster reconstruction- one year ahead of schedule. Tax breaks on investment, lower corporate tax rates and deregulation in such sectors as medical services, nursing care and agriculture would all help to spur growth.
Even if the tax is raised, the government will still have a long way to go to reach the fiscal rehabilitation finish line.
A consumption tax of 15% would give the government a better chance to achieve the goal of a primary balance surplus by fiscal 2020. To significantly reduce the debt-to-GDP ratio, the tax would need to be raised to 20%.
My proposal is that the government should raise the tax by one percentage one point every year after increasing it to 10%.。我的解决方案在增加到10%之后，按照每年1%的速度逐年增加。
The annual increase can be stopped once the government succeeds in curbing social security spending and boosting economic growth power. We must avoid a situation like Greece, which has been forced to reconstruct state finance amid negative growth.
Quite a few experts say the 1997 tax increase was not the main cause of the subsequent recession. What do you think?
I don’t believe it. Multiple factors caused the recession. It is not scientific to exclude the tax hike’s impact.
In the best scenario, Japan would work to address its fiscal problems without causing serious damage to the economy.
Let me use an example from golf: if you aim for the green with your first shot, your ball may end up in a pond or a bunker. The government has to remember the risk that Abenomics could fall by the wayside.
What about the argument that the economy slowed down after the government raised the consumption tax from 3% to 5% in April 1997?
The argument that the tax increase was the main cause of the subsequent recession is clearly wrong. The economy did fall into negative growth in the April-June period of 1997, but it returned to positive growth the following quarter. The real culprit was the Asian currency crisis and the banking crisis in Japan that occurred in the second half of fiscal 1997.
I want people who disagree with me to present data to substantiate their claims.
Today’ Japan need to worry about the financial system and can withstand a higher tax. Failing to rehabilitate state finances and letting JGB interest rates rise would be much more risky. The tax increase will reduce these risks. I want the government to finalize the tax hike soon so that Abenomics can succeed.