Japan’s Ruling Party Split as Lawmakers Approve Controversial Tax Hike

Posted June 26th, 2012 at 4:05 am (UTC-5)
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Japanese lawmakers have approved a controversial tax hike plan to help curb growing public debt, despite a rebellion by some in Prime Minister Yoshihiko Noda's ruling party.

The plan to double the sales tax to 10 percent over three years easily cleared Japan's lower house of parliament Tuesday.

But public broadcaster NHK reported that 57 members of the ruling Democratic Party of Japan failed to back the bill, exposing a deep party rift that could weaken Mr. Noda's grip on power.

Dozens of DPJ members who oppose the bill have threatened to form a breakaway party. If more than 54 lawmakers decide to leave, the Democrats would lose their majority in the more powerful lower house.

Prime Minister Noda made passage of the tax hike plan the main goal of his term in office, saying it is necessary to reduce Japan's debt, which exceeds two years' worth of its economic output.

The bill that would also revamp Japan's social security system is expected to pass the opposition-controlled upper house.