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Japan’s Abe faces crucial tax-election decision

Japan’s Abe faces crucial tax-election decision
PM expected to postpone tax rise as country prepares for election to upper house, and possibly lower house as well

By Todd Crowell

TOKYO (AA) – For one heady week, Japanese Prime Minister Shinzo Abe was at the center of international attention, first hosting the G7 meeting in central Ise Shima and then escorting President Barack Obama in his historic visit to Hiroshima.

Now it is time to come down to earth and deal with the still limping Japanese economy by postponing a sales tax increase, stimulating the economy and preparing for the fast-approaching election to the House of Councilors, the upper house of parliament, this July.

Abe has apparently concluded that raising the national sales tax from 8 to 10 percent may not exactly be a winner in the upper house election, or in a general election, should he decide to call one this summer.

The prime minister has already told leaders of his own Liberal Democratic Party (LDP) that he wants to postpone the tax rise for more than two years to October 2019, when he will conveniently be out of power having served two full terms as president of his party.

This will be the second time that Abe has postponed the tax rise. The first time came in November 2014, just as he called a snap general election in which he later won a landslide victory.

He may decide that third time is lucky and call yet another snap election to coincide with the upper house voting in July, a so-called double election.

Double elections are rare in Japan -- the last one was in 1980 -- and they involve difficult to predict political dynamics.

So Abe will have to weigh the pros and cons carefully. He does not have to call an election for two more years, but he has shown a penchant for holding snap elections and has benefitted from them.

The premier has expressed hesitation about calling an election this early, but then he also said he didn’t want to postpone the tax rise again.

Recent polls have given Abe and his party quite a popularity boost, a lingering consequence of the G7 meeting and the Hiroshima visit.

The support for the cabinet rose 7 percentage points to 55, according to a Kyodo News survey released Sunday.

The prime minister is expected to make the official announcement Wednesday along with some other measures for boosting the economy, such as a supplementary budget to spend on fiscal stimulus and helping southwestern Kyushu recover from a recent earthquake.

The opposition Democratic Party (DP) seems to have taken a damned if you don’t and damned if you do approach.

Party spokesman Tetsuro Fukuyama challenged the cabinet to raise the tax, which the DP surely would then try to turn into a campaign issue against Abe.

Ironically, it was the Democratic Party of Japan, under former prime minister Yoshihiko Noda, that passed the sales tax bill (with a lot of help from the LDP). He then went on to lose the general election by a landslide.

The initial sales tax rise has been a drag on the economy since it was first introduced. Consumer spending remains weak, and that is blamed mainly on the additional tax on consumption.

source: News Feed
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