Sunday, August 18, 2013

I Now Believe that Abe Will Not Do the Full 3% Consumption Tax Hike in April

Prime Minister Abe has been persuaded by two economic advisors, Professor Koichi Hamada and former non-mainstream MOF bureaucrat Etsuro Honda, to adopt a gradual five-year phase-in instead of the two-installment plan that is currently in place. It could be jiggered, but the idea is to more away from the three-party deal. That, or Honda is a complete flake, which I do not believe he is. MOF will not like it, but it will go along. Likewise, BOJ.

I can’t take any meaningful bets since I live in Japan (and I’m not so confident that I’m willing to bet the house), but I’m sure that the authorities won’t chase me down if I make a friendly wager to all and sundry for an up to-2,000 yen lunch. Let’s put it this way: If the consumption tax goes up 3% on April 1, you win; if it doesn’t, I do. Wait, I’ll give you the full FY2013 for the Abe administration to do so. Any takers please contact my Gmail account, which is easily found around my blog.

1 comment:

Anonymous said...

What confirmed your belief that PM Abe will not go through with the planned consumption tax hike? Was it the announcement of meetings with stakeholders from Aug 26-31, including Prof. Honda?