Cutting the consumption tax is gaining ground in Japan as a possible way to counter the effects of U.S. tariffs, although a debate is still raging as to whether such a policy, long seen as a taboo, would actually do much to help households or the economy in general.
Cash handouts have traditionally been the preferred way to quickly stimulate the economy during times of hardship, as they leave in place a fundamental pillar of government finance and ensure that collections key to old-age benefits are still made.
But following the implementation of tariffs by U.S. President Donald Trump, reducing the consumption tax — which is much like a sales tax and is set at 10% for most items and 8% for food and beverages — has been suggested as a way to protect the economy's fragile recovery.
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