Hosokawa also enacted cuts in income and resident taxes, intended to help Japan out of the recession that had followed the Japanese asset price bubble of the late 1980s and early 1990s. After pressure from the finance ministry, the government compensated for these cuts by announcing an increase in the consumption tax from 3% to 7%, effective from 1997. The move was controversial within the cabinet, as Ichiro Ozawa favored a 10% rate while the Japan Socialist Party would not agree to an increase. Hosokawa announced the increase but retracted the announcement the next day, leaving the tax at 3%. The government's response to the issue weakened its hold on power and was said to hasten its demise. The tax was eventually increased to 5% in 1997 by LDP Prime Minister Ryutaro Hashimoto.