Contradiction in Reasoning

Prime Minister Shinzo Abe officially made two major decisions on Tuesday. One was to delay the starting of new consumption tax rate of 10% for eighteen months from October next year, and another was to dissolve the House of Representatives next Friday. Which was more important for him? It was the dissolution, definitely. However, each of the decisions has fatal contradictions to persuade the legitimacy of his idea.

As Prime Minister, Abe has reiterated his conviction in his economic policy for these two years. “There is no way other than simultaneously seeking both economic revitalization and fiscal rebuilding,” has been his ordinary appeal to the public. He could not put any one of those two options, fiscal stimulus and further taxation, aside. That was, in other words, stomping two pedals of acceleration and brake in a car.

His announcement on Tuesday was a declaration of policy change, which prioritized economic growth to consumption tax hike. Abe explained that if he could keep on stimulating three more years, there would be a chance to raise the tax rate. But a question still remains: where had his promise to seek both growth and fiscal rebuilding gone? The fact is that fiscal rebuilding will be delayed for eighteen months to buy time for continuing Abenomics. Implementation of achieving targeted primary balance in 2020 becomes less possible. Although one of the two options was dropped, Abe still insists that both will be achieved. That is one contradiction.

Another contradiction was the reason of the dissolution. Abe explained that he kept on saying that his government was going to raise consumption tax rate as scheduled. According to his idea, he needed to hear public opinion as far as he would be doing something different from what he had promised. That was his reasoning. To support his theory, he drew an old principle of democracy, no taxation without representatives. “As raised in the Independence War of America, no taxation without representatives is a basic concept of democracy. In short, taxation is democracy. That is why I ask election to get approval in my decision,” said Abe.

It does not make sense, Mr. Prime Minister. The concept was to assure that the decision on taxation should not be done by discretion of a political leader, but with approval of the people. You are not asking taxation, but postponing taxation, to which the people basically have no opposition. If you uphold democracy in taxation, why didn’t you ask people’s opinion through an election, when you raised the tax rate from 5% to 8% in April? Not asking opinion in taxation and asking it in delaying taxation contradicts each other.

After all, Abe simply wanted to maintain his administration as long as possible by dissolving the House in the best timing. It is better for him to say that he did what he wanted to do than introducing a complicated reasoning, which he is not good at.