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February 13, 2012

[SSJ: 7155] Re: Why Noda is pushing a tax increase

From: Paul Midford
Date: 2012/02/13

Just a brief addition to Gregory Noble's excellent post on the politics of raising the consumption tax. While a solid majority opposes Noda's tax increase plan, it is not true that a solid majority opposes any tax increase. When asked generically about raising the consumption or other taxes, a large minority, plurality (and if my memory serves me correctly sometimes even a small majority) often answer in support. What's interesting is that once Noda proposed this increase support plunged. This suggests that the public is not convinced by this plan, or is ambivalent enough to support increases in principle but not in practice. If it's the former then a differently crafted plan (although what the specifics of that would be is unclear to me) would gain much more public support. If it's the later, then the public in the end might not be as angry with the DPJ for pushing through this tax increase as the most recent polls suggest, and it might even help the party's long term image as a responsible governing party. Noda might reasonably assume that the DPJ will lose the next election anyway, but if he makes the LDP look irresponsible this time, as Gregory suggests, he might make the DPJ look responsible by comparison after LDP rule returns, perhaps paving the way to victory in subsequent elections.

Of course, if the LDP fails to win a majority in the next election, which seems plausible to me, it might have to make a coalition with Mina no tou, Genzei Nippon or Hashimoto's party. Aligning with those parties would in and of itself preclude a tax increase.

Best,

Paul

Approved by ssjmod at 11:28 AM