Saturday, July 10, 2010

Why Is the DPJ Catching All the Flak on the Consumption Tax Hike Issue?

Here is my response, rearticulated as a blogpost, to an issue raised on an Upper House election-themed mailing list.

It actually overlaps with yesterday’s post. Namely: Why is the Japanese electorate, according to the Japanese media, taking it out on the DPJ for Prime Minister Kan’s enthusiasm for a consumption tax hike, but not on the LDP, who broached the subject in the first place by putting a five percentage point hike in its election manifesto? Well, the LDP isn’t exactly gaining traction as far as overall voter sentiment is concerned—it’s the single-seat races where it’s surging in the surveys*—and I’m not a mind reader and do not have the benefit of a newspaper or grant to cover the costs of a survey, but here are a few observations/conjectures.

First, higher taxes are never popular, so there’ll be a temptation to shoot the messenger under the best of circumstances. In fact, the consumption tax in its various permutations has been the third rail of Japanese politics since the days of Prime Minister Ohira, so it would have been doubly prudent to have crafted a game plan before touching it. Instead, Prime Minister Kan threw out ideas about the tax rate, timeline, and exemptions as if he were engaged in a brainstorming session. We saw another case of analogous, if far more trivial, competence issues causing damage to the Fukuda administration during the rollout of the Late-Term Medical Case Insurance system.

Second, there’s the arithmetic. Which is more likely, pro-tax hike people who were inclined to vote for the LDP changing their minds and opting for the DPJ because Kan got religion, or anti-tax folks abandoning the DPJ and voting for a third party or abstaining altogether?

Third, this election is a referendum on the DPJ, not the LDP. The LDP would like to have as many of those floater voters coming its way as possible, but it’ll be okay if they stay away come 11 July or even throw in their lot to Your Party, as long as they don’t put the names of DPJ candidates on their prefectural district ballots.

What’s interesting is that the outcome—assuming the media surveys are correct—will make the LDP more of a party of the peripheral. That’s the other side of winning in the singe-seaters. Given demographic trends, i.e. concentration in the large metropolitan areas, which will continue to be reflected in the periodic census-based reallocation, it can’t be happy about that, as I’ve mentioned before.
* There’s a pattern here that highlights the north-east/south-west political divide. I can’t say more about this now since I don’t want to give away anything that Aurelia George Mulgan might be posting later on the SSJ Forum (it’s a useful site, I recommend that you subscribe if you aren’t subscribed already) regarding an interesting finding of hers.

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