At a time of stagnant wage growth, few consumers will relish the prospect of paying up to 5% more for everything they buy. However, at its current 5%, the consumption tax is the lowest in the rich world’s sizeable economies, which has bred a sense in Japan that raising the tax was inevitable sooner or later. Even at 10%, it will be at half Europe’s levels—and getting there may boost growth in the short term, by bringing spending forward.
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