For Japanese policymakers, broaching the subject of the consumption tax has traditionally been seen as disturbing a hornet's nest, but the issue is poised to become a defining point of contention during campaigning for the upcoming Upper House election in July.
On the one hand, a cluster of opposition parties are arguing for tax cuts to sustain consumer spending amid soaring prices. Some are calling for a one-off cut limited to food products, as is the case with the Constitutional Democratic Party of Japan. Others, such as the Democratic Party for the People, are suggesting the government make up for any shortfall in tax revenue that arises from a lower rate by issuing debt.
On the other hand, the ruling Liberal Democratic Party appears to be resisting calls for a tax cut and is increasingly tilting toward emphasizing its role as the only party that is able to take responsibility for ensuring the country's financial stability.
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