TAX NEWS - 2010

Japan Tax: Taxes Tax Kan's Polls

Naoto Kan's push to raise taxes dented his popularity ratings.

The first voter reviews are in on Naoto Kan's surprisingly bold embrace of a steep consumption tax increase — and they're not rave.

Two surveys in the Monday papers showed erosion in the new prime minister's popularity since he declared last week he'll push to raise the sales tax, possibly doubling it to 10%.

The Asahi Shimbun showed Mr. Kan's approval rating had fallen in a survey taken over the weekend to 50% from 59% a week earlier. The Yomiuri Shimbun also registered a decline, albeit a smaller one: 55%, from 59% over the same period.

Mr. Kan's endorsement of the tax increase in advance of the July 11 upper house election is a gamble that the politics of the issue have changed since numerous previous Japanese leaders have taken hits for supporting the measure.

It's a bet reminiscent of George W. Bush's 2000 campaign pledge to overhaul Social Security that the sales tax in Japan — like Social Security in the U.S. — is no longer the "third rail" of politics. (That's a reference to the high-voltage portion of the railroad track — touch it and get electrocuted.)

The Asahi poll said that 39% of those asked approved of Mr. Kan's tax position while 50% disapproved. But the same survey showed there may be support for some tax increase — just, perhaps, not as steep as Mr. Kan has suggested. It said 46% were for raising taxes in general, while 45% were against.

The Yomiuri said 48% supported Mr. Kan's tax position and 44% disapproved.

As for the upcoming election, the Asahi showed 36% would vote for the DPJ, down from 43% a week earlier. The Yomiuri showed support about steady: 30% this past weekend from 31% a week earlier.