But quantitative easing will only affect expected inflation if the increase in the size of the central bank’s balance sheet is not only sizeable but also perceived as being permanent. 10 The experience of the Bank of Japan provides a clear-cut example of a temporary expansion of the monetary base that did not affect private sector inflation expectations.
The United Kingdom, for example, has announced that it will raise the corporate tax in 2023 for the first time in about 50 years to secure fiscal resources for taking measures in response to COVID-19. In the case of Japan, the funding of reconstruction following the Great East Japan Earthquake has been secured through a tax increase,  9  particularly on income tax.