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Experts discuss spousal tax deduction

  • October 2, 2016
  • , NHK
  • JMH Summary

Six experts discussed the pros and cons of a GOJ plan to abolish the spousal tax deduction. Under the existing system, the taxable annual income of the head of household is reduced by 380,000 yen if their dependent spouse earns 1.03 million yen or less a year. By reducing the taxable income, the household pays less tax overall. The system was introduced in 1961 when Japan was undergoing rapid economic growth. Wives at that time were expected to stay home, perform household chores, and raise children while their husbands worked. The tax break was designed to help support the “typical” Japanese family in those days that subsisted on a single income. However, the tax benefit today is discouraging many women from seeking jobs for which they would earn more than 1.03 million yen. The government explains that the reform is aimed at unlocking the dormant potential of Japanese women. Motoshige Ito, a member of the GOJ Council on Economic and Fiscal Policy, supported the plan during the discussion as part of the GOJ’s efforts to reform work styles in Japan. However, economic journalist Hiroko Ogiwara argued that what impedes women from going to work is not the spousal tax deduction but other factors, including the need to take care of senior members of the family.

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