The afternoon's big news:
Tanigaki calls for two-step Japan sales tax hike
TOKYO, July 28 - Finance Minister Sadakazu Tanigaki, a dark horse contender for Japan's next prime minister, said on Friday the government may need to consider a two-stage increase in the nation's politically sensitive consumption tax.
Tanigaki on Thursday formally announced his candidacy for the ruling Liberal Democratic Party (LDP) presidential election whose winner is virtually assured to succeed Prime Minister Junichiro Koizumi because of the party's power in parliament.
As part of his policy platform, Tanigaki said on Thursday the consumption tax, now at 5 percent, should be raised to at least 10 percent by around 2015.
Providing more details about how to approach such a tax hike, Tanigaki told a news conference on Friday: "It is probably appropriate to consider a two-stage approach."
The first stage will focus on achieving Japan's goal of shifting the primary balance -- revenues and spending excluding debt issuance and servicing -- into surplus by the fiscal year starting in April 2011, he said.
Revenues for the first-stage tax hike would also be needed to finance planned reforms that will require the government to pay more for the nation's pension system from April 2009.
An additional tax increase would be needed later to help the government achieve its goal of lowering the ratio of outstanding public debt to gross domestic product by the mid-2010s, he added.
Now, one might wonder the how it was that the Minister of Finance...I will say that again...the Minister of Finance came to decide that the best way to close Japan's fiscal gap is to raise the consumption tax from 5% to 10% in a two-stage process sometime over the next 10 years.
You will not believe it.
You will not believe it because it is so mind-boggling it leaves one's brain starving for oxygen.
He made it up.
He made it up. This morning. On live TV.
Tanigaki was the 8:00 a.m. guest on Mino Monta's influential Asa Zuba! television program. Mino and the other guests tried their darndest to be nice--but Tanigaki's salmon-like all-consuming urge to swim upstream, unburden himself and die could not be curtailed.
Among the gems was his introduction of his plans for revitalizing the commercial districts of small towns (the shattā-gai problem):
"Well, the people of the big cities (daitokai) may not like hearing this..."
Kusssssssabana! Takashi and Noriko, hide your wallets! Tanigaki's got a plan...and he says you're not gonna like it!
Damn straight we're not going to like it.
Gettin' hard to tell what's worse--locusts, tsunamis, typhoons or the MOF.
Anyway, in addition to the usual humiliating references to the eight years it took Tanigaki to get his Bachelor's degree and the seven years it took him to pass the bar, Mino and the more serious guests plugged away at his policy promise to raise the consumption tax to 10%.
When someone-- I cannot remember whether it was Mino, his newspaper sidekick or someone else--asked Tanigaki how the raise would be implemented, Tanigaki demurred, saying a rise would, "of course, be a shock to the system"--and thus would have to be implemented according a method determined by careful consideration of the alternatives and the repercussions.
A fine, nuanced position that survived almost 25 seconds.
As the host and guests pressed for specifics, Tanigaki decided (if that is what you want to call it) to wing it:
"Oh, I guess it would most likely have to be in two steps."
Shazam! Presto! There you have it! Your careful consideration of the alternatives and the repercussions! Based on analysis recently plucked from my nether regions!
* * *
What is frightening is not that Tanigaki has even a snowball's chance in hell of prevailing in the presidential race.
Unless of course Abe Shinzō steps out in front of a moving vehicle.
No--what is frightening is that Abe's "brain trust"-- the community of like minds that is supposed to save us from the Tanigakis of the world-- seems stuffed with hacks, kooks and flim-flam artists.
But that observation is for another post...perhaps after I check out Toward a Beautiful Country...