The Democratic Party for the People advocates the elimination of the "1.03 million yen wall." This has attracted attention as it would increase the take-home pay of part-time workers, but some experts say it is an "illusory wall." What is the reality? ■Is 1.03 million yen an "illusory wall"? Part-time workers refrain from working, newscaster Ayako Uemura: The Democratic Party for the People is urging the ruling government to reconsider the "1.03 million yen wall." Since income above 1.03 million yen is subject to income tax and income is reduced, the aim is to raise the wall to 1.78 million yen and increase take-home pay. Let's take a look at the actual salary income of women with spouses. It drops sharply at the 1 million yen mark. We can see that there are many married women who work to make an annual income of 1.03 million yen. Economic commentator Keiichi Kaya points out that "there are probably surprisingly many people who misunderstand" about this 1.03 million yen wall. What does this mean? For example, let's look at the case of Ms. A, who works at a company with fewer than 50 employees. [Ms. A] Income (part-time): 1.25 million yen Employment insurance: 7,500 yen Income tax: 10,800 yen Resident tax: 28,600 yen Take-home pay: 1,203,100 yen *Financial planner Nanako Tsukagoshi's calculation Even if you exceed 1.03 million yen by a large margin, the actual income tax you will have to pay is only about 10,800 yen. There may be a misunderstanding here. The next point is that it may be the "spouse and dependent deduction." For example, if a husband earns less than 10.95 million yen a year and his family, and the wife and children also earn less than 1.03 million yen. They are eligible for the spouse deduction and dependent deduction, but if they exceed 1.03 million yen, they will no longer be able to receive these deductions, and they may think that their "household income will decrease," and therefore refrain from working. However, in reality, there is something called a "special spouse deduction," and they can receive the same amount of preferential treatment as this "spouse deduction." Kaya points out, "Many people, both part-timers and employers, may not know about this 'special spouse deduction.'" Economic commentator Keiichi Kaya: It is said that "if you earn more than 1.03 million yen, your take-home pay will decrease," but in terms of your own income tax, you will have to pay tax, but your take-home pay will not be negative. It's just a matter of whether the tax you pay is a gain or a loss, and your take-home pay will not decrease drastically. So, what will have its take-home pay reduced? For example, let's say there is a full-time housewife with a husband, or a student. If these people work more than 1.03 million yen, the husband's tax and the student's parents' tax may increase, and the idea that "the take-home pay may be negative on a household basis" is a bit confusing. In particular, housewives are currently causing problems by refraining from working. Due to the special spouse deduction, it is actually okay to work up to 1.5 million yen, but this is not well understood and they say, "It will exceed 1.03 million yen, so let's stop," and there is a high possibility that business operators say, "This part-time worker is in trouble if she exceeds 1.03 million yen," and set up unnecessary shifts. It's a complicated system to begin with, but I think it's best to check and look into it again. Chiaki Horan: As for children, is it true that if their income exceeds 1.03 million yen, they will no longer be able to receive the deduction? Kaya: That's correct. Takahiro Inoue: The core of this issue is that if their income exceeds 1.03 million yen, the burden on parents will increase, and students will refrain from working. The Democratic Party for the People is trying to raise the 1.03 million yen barrier to 1.78 million yen based on the increase in the minimum wage, but wouldn't it be better to raise the amount based on price fluctuations and living expenses? How much of a raise do you think is appropriate, Kaya? Kaya: I don't think there are many people, including myself, who are opposed to raising the basic deduction itself. The problem is the amount. The amount of the basic deduction should be determined by the price level. If we calculate from that, it has increased by about 1.1 times over the same period, so 1.03 million yen x 1.1 is 1.134 million yen. If this is raised to 1.78 million yen, the 1.03 million yen problem will be solved, but it will also become a large-scale tax cut measure that will allow high-income earners to be eligible for tax cuts. Opinions among experts are divided on how reasonable this amount is. ■Abolishing the "1.06 million yen wall" Increasing number of employees in the Employees' Pension Insurance In the midst of this, there is a movement towards another annual income wall. In addition to the 1.03 million yen wall, there is the "1.06 million yen wall" and the "1.3 million yen wall." The 1.03 million yen wall is the one that generates income tax, but the 1.06 million yen wall generates payments for employees' pension insurance and health insurance. The Ministry of Health, Labor and Welfare is moving to abolish the 1.06 million yen wall. Until now, the requirements for joining social insurance were "annual income of 1.06 million yen or more," "51 or more employees," and "working 20 hours or more per week," but there are movements to abolish the two requirements of "annual income of 1.06 million yen or more" and "51 or more employees." 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