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When Summers was the US Deputy Secretary of the Treasury, he told the Japanese government not to raise the consumption tax rate from 3% to 5%. [41] But the government ignored his warnings, and raised the tax in 1997 for the purpose of balancing its budget. Although the country recorded a GDP growth rate of 3 percent in 1996, the economy sank into recession in 1998. [3] On top of that, the revenue of the government decreased by trillion yen in 1998 mainly because Japan's domestic consumption stumbled. Graph A shows the revenue of the Japanese government during 1994-2006. [42] The tax revenue reached a peak of 53 trillion yen in FY 1997, and declined in subsequent years, being still 42 trillion yen [43] (537 billion USD) in 2012.

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