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Strategies & Market Trends : Asia Forum

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To: Stitch who wrote (2853)	4/3/1998 11:15:00 AM
From: GuinnessGuy	Read Replies (1) of 9980

Stitch, "I don't think this would give you the immediate injection the Japan economy needs. People would just delay purchasing until the full implementation wouldn't they? I know I wouldn't buy a car until the full decline was realized." Boy, I can see my communications skills are declining =-( The main point I was getting at was that the sudden and full cut WITH a declining feature would spur the Japanese people to spend less per item NOW(20% in this example) or wait and pay more later(that's the 2-4% per month absolute decline in the tax, not in the cost of goods). For example, if something cost 100 now, then on the first day of the tax reduction it would cost 80. With a 4% declining absolute tax rate then immediately following the first month the cost of the item would go to 84. The third month, the cost would go to 88, etc. Thus, after five months the item would return to its previous price. Hope that this is more clear... BTW -- Does anyone know what the national sales tax is in Japan? Craig

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