Japan consumption tax hike not so much a question of when as how

From Japan Today (Kyodo)

One obvious solution to the problem of people not paying pension coupons here–as I’ve said–is obviously just to raise the consumption tax. Instead of paying 15,100 yen (tax-deductible) at the convenience store counter, people would then be “contributing” (Canada or Australia-style) along the way toward a subsistence pension.

Depending on how the tax is structured, this could also even out the unfairness created under the Koizumi government when they changed the amounts people would be able to accrue under the public pension system here (which had the unintended effect of increasing noncompliance!) It’s hard not to comply with a consumption tax, and since it’s collected all along way, it’s less glaring than a “mandatory contribution”/tax bill that hits you once a month.

For people lucky enough to be in an employer plan, it’s just a simple matter of adjusting the contribution rates to reflect that the subsistence pension part is now coming out of consumption tax.

The DPJ is right—Japan’s treasury doesn’t have the dough. The hole is not as deep as advertised (80% net GDP versus scary headline numbers of 200% gross GDP), but the simple fact is that they’re going to have to start collecting European-style level of taxes if they want to continue offering European-style benefits.