Prime Minister Yoshihiko Noda risks stalling the economy by pushing through his consumption tax increase, which may dampen spending even as it aids efforts to tame the world's largest debt burden.
The recovery after last year's earthquake and tsunami could grind to a halt in 2014 when the first increase will take effect, according to UBS AG and Itochu Corp.
The slump would be a repeat of 1997, when an increase in the tax contributed to pushing the economy into a 20-month recession, costing then Prime Minister Ryutaro Hashimoto his job.