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Japan Ruling Party Loses Big On Tax Talk

From an unfazed Associated Press:

Japanese Prime Minister Naoto Kan

Japan ruling party loses on tax talk: exit polls

By Mari Yamaguchi, Associated Press Writer

July 11, 2010

TOKYO – Battered by voter backlash over the prospect of higher sales taxes, Japan’s ruling Democratic party suffered a heavy defeat in parliamentary elections Sunday, media exit polls showed, dealing a blow that could hinder the government’s ability to control soaring debt.

The projected losses were worse than expected and will make it difficult for Prime Minister Naoto Kan’s young government to effectively tackle serious problems confronting the world’s second-largest economy, from reining in its bulging deficit, reviving growth, and support a rapidly aging population.

Of course the AP doesn’t consider the idea of cutting spending.

The projected results indicate that the ruling coalition lost its 122-seat majority in parliament’s upper house. The election won’t directly affect the Democrats’ grip on power because they control the more powerful lower house of parliament…

A fiscal hawk and social progressive, Kan warned immediately after taking office last month that unless Japan took dramatic steps it could face a Greece-like fiscal crisis — a comparison experts say is exaggerated.

But his proposal to possibly double Japan’s 5 percent sales tax in coming years clearly hurt his party’s chances in the elections, where half the upper house’s 242 seats were up for grabs.

Kan acknowledged that the proposal led to the losses and said he had brought up the topic abruptly and without enough explanation.

But he declared that he isn’t quitting…

Public broadcaster NHK predicted that the Democratic Party of Japan won between 43 and 48 contested seats in the upper house, down from 54 before the polls. Other TV stations made similar projections. Kan had set a target of keeping those 54 seats.

The Democrats’ tiny coalition partner, the Peoples’ New Party, got no seats, the exit surveys showed…

"People are desperate for change and reform, and none of the parties are delivering," said Kingston. "I think that they’re profoundly skeptical and disappointed. And that’s the message they sent tonight."

Kan saw his initially high support ratings drop after his tax hike proposal, prompting him to backpedal somewhat on the issue.

In the waning days of the campaign, Kan promised that any tax increase wouldn’t happen until after the next lower house election, which must be held within three years, saying he wanted a public mandate for any decision on taxes.

Japanese newspapers praised Kan in Sunday commentaries for being brave enough to bring up the possibility of higher taxes, but the damage appeared to have been done among voters who are struggling in a stagnant economy with high joblessness…

In case anyone was wondering why the Democrats would not present a real budget and why Mr. Obama’s ‘debt commission’ isn’t going to make its report until after the elections.

This article was posted by Steve on Sunday, July 11th, 2010. Comments are currently closed.

2 Responses to “Japan Ruling Party Loses Big On Tax Talk”

  1. Chuckk says:

    Sorry boys, the piggy bank is closed.

  2. proreason says:

    Have you ever watched a gambler that you know is either at the end of his bankroll or time in the gambling town literally throw away the last of his money?

    That’s what politicians are like.

    Except of course, it’s OUR money.

    And Obamy is the worst of the lot.

    Because this country has the most to lose.

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