Cost of Japan's over-tourism

Photo by Sorasak on Unsplash

Japan is currently facing the issue of over-tourism. The tourism industry is benefiting, as are the Japanese government and those employed within it. However, local residents are struggling with disruptions to their daily lives — people often dislike changes, especially as they age. They contend with crowded buses (many locals rely on buses due to limited retirement incomes or low wages) and congested streets.

Additionally, food prices are rising. The demand for rice has increased due to poor crop yields from adverse weather conditions, compounded by ongoing demand from the previous year due to COVID-19. Ultimately, it is the lower and average-income individuals who bear the brunt of these challenges, while others benefit from favorable foreign exchange rates. Is this fair? Not really, but it is a fact of capitalism. Many parties profit from the transactions between farmers and consumers, and the government can exert some control through taxation on these exchanges.

While shopping for food in Japan, I noticed the country’s tax rates. I believe the approach taken by the USA to reduce taxes on food is beneficial. Here are some examples of grocery tax rates in various states:

States that tax groceries:

• Alabama: 3.000%
• Arkansas: 0.125%
• Illinois: 1.000%
• Missouri: 1.225%
• Tennessee: 4.000%
• Utah: 1.750%
• Virginia: 1.000%

States that tax groceries at their standard sales tax rate:

• Hawaii: 4.000% (Some residents may claim a tax credit)
• Idaho: 6.000% (Most residents may claim a grocery credit)
• Mississippi: 7.000%
• South Dakota: 4.200%

States that do not have a state sales tax on groceries:

• Alaska
• Delaware
• Montana
• New Hampshire
• Oregon

I grew up in California, where most food products for human consumption are generally exempt from sales tax, commonly referred to as the California food tax exemption.

Taxable Food Items & Situations:

• Hot prepared food: Sales tax applies to food products sold heated, like hot sandwiches or soups, whether eaten in or taken to go.
• Cold prepared food consumed on the premises: If a restaurant provides dining facilities (tables, chairs, etc.), cold prepared food (like a cold sandwich or salad) is taxable when consumed there.
• Carbonated beverages: Sodas and carbonated bottled water are subject to sales tax.
• Alcoholic beverages: Sales of alcoholic beverages are taxable.
• Candy and sweetened snacks: Candy and snack mixes with added sweeteners are generally taxable.
• Food products for non-human consumption: Pet food and animal feed are taxable.
• Vitamins, medicines, and supplements: These are typically considered taxable.
• Food purchased with CalWORKs cash aid benefits: These are subject to tax unless another exemption applies.

Non-Taxable Food Items:

• Groceries for home consumption: This includes produce, meat, poultry, fish, dairy, bread, cereals, and other unprepared food items.
• Cold prepared food taken to go: Cold prepared food, such as a cold sandwich ordered for takeout, is not taxable.
• Hot baked goods taken to go: Hot baked goods, like croissants, are exempt when sold individually and to go.
• Non-carbonated beverages: Bottled water and most juices are not taxable.
• Food purchased with CalFresh benefits: These items are entirely exempt from sales tax.

I believe that adopting a food tax exemption similar to California’s would be effective for Japan, especially considering the essential nature of food for sustaining life. While separating taxable and non-taxable items may be challenging, especially for processed foods, it would ultimately benefit the public, despite likely opposition from politicians connected to the food manufacturing industry.