Conflict within the Democratic Party of Japan over raising the consumption tax rate has ended, for now, with Prime Minister Yoshihiko Noda's offer of a compromise that would delay the tax hikes by six months from dates proposed earlier by the party's Tax System Research Committee.
Noda can barely continue to say he intends to maintain fiscal discipline amid strong resistance from party members opposed to raising taxes.
If the DPJ can get opposition parties to agree to its plan, the consumption tax rate would be raised for the first time since April 1997, when it was increased to the current 5 percent.
According to a draft plan for integrated social security and tax reform decided by the government and ruling parties in late June, the consumption tax rate would be raised in stages to 10 percent "by the mid-2010s." (Yomiuri)
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