A Tax Revolt in Japan, and a Bond Bubble Too

About 200 housewives marched down a shopping street in central Tokyo, beating pans with ladles and shouting slogans criticizing a government plan to double Japan’s 5 percent consumption tax. “Ordinary people like us have a limited amount of money we can spend each month,” says Natsuyo Makabe, a protester who took part in three demonstrations in June against the tax hike as well as nuclear energy and a free-trade pact. “Ninety-nine percent of the public will have to cut back on what they buy.”

The apron protesters, as they are known, argue that a tax increase would crimp household budgets just when the economy can’t withstand a drop in consumption. They say it’s a bad time for Prime Minister Yoshihiko Noda to rein in public debt that will be over 230 percent of national output this year, the biggest anywhere. The tax hike cleared the lower house of Japan’s Parliament in June. Noda got the tax approved by the upper house on August 10 by promising to hold early elections. That’s a dangerous bargain; his coalition has already started to crumble because of opposition to the tax.