A consumption tax is “not the best tax,” according to Nobel Prize-winning economist and Columbia University Prof. Joseph Stiglitz.
A day after speaking with Prime Minister Shinzo Abe to kick off a series of international financial and economic analysis meeting at the Prime Minister’s Office, Stiglitz spoke about taxes, fiscal policy and the Bank of Japan’s actions in an interview in Tokyo on Thursday.
The nation’s consumption tax is scheduled to rise from 8 percent to 10 percent in April 2017, but some government officials believe Abe is preparing to delay the tax hike again. While recognizing the government’s desire to raise revenue, Stiglitz suggested other avenues to gain the desired results and stimulate the economy.
“A better tax would be a carbon tax,” he said, as it “encourages demand because firms have to spend money to retrofit for global warming.”
He urged the government to postpone the consumption tax hike and “focus now on raising other taxes” — such as property, financial transaction and inheritance taxes — and “changing the structure of the corporate income tax.” When the effects of those taxes can be analyzed, then the government can assess whether to raise the consumption tax, he said.
-More at The Japan News