At first reading, it sounds like a classic political morality tale: an idealistic new prime minister, just before a difficult upper house election, discusses openly the need for a higher consumption tax. Voters duly deal his party a crushing defeat. The moral of the story: only a fool thinks honesty is the best pre-election tax policy.
Such a cynical interpretation of the upper house election setback suffered by Japan’s Democratic party last weekend seems to chime with recent events in the UK. There, the new Conservative-Liberal Democrat coalition lost no time unveiling an increase in value added tax to 20 per cent, despite both parties having disavowed any such plan during their campaigns.
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