The annual autumn tax debate began on the 14th. ■LDP: "A solution to a complex equation..." A meeting of the ruling party for next year's tax reform. Normally, the LDP and Komeito parties put together a draft at the end of the year, but this year the circumstances are different. LDP Tax Commission Chairman Yoichi Miyazawa: "This year, the members have changed significantly, so we need to find a solution to a somewhat complex equation." When I hear the words "complex equation," what comes to mind is the debate on the "annual income wall" that the opposition parties are threatening to bring to mind. ■The focus is on the amount of the increase to "1.03 million yen" The Democratic Party for the People faced off against the LDP in the evening. In this meeting, they will be calling for an increase in the "annual income wall," which they strongly advocated during the election. The "1.03 million yen wall" is a result of part-timers and casual workers refraining from working because income tax is levied when annual income exceeds 1.03 million yen. The Democratic Party for the People is trying to raise this "wall" to 1.78 million yen. The LDP, on the other hand, is reluctant to raise it all the way to 1.78 million yen. This is because the government estimates that tax revenues will fall by about 7 to 8 trillion yen for the national and local governments combined, and there are concerns from local governors. After about 20 minutes of discussion, Miyazawa, Chairman of the Tax Commission, said the following. (Q: Do you think it is possible to raise it to 1.78 million yen?) I think that will depend on future discussions. A specific proposal will probably come out next week, so I think it's best not to make any predictions before then. Furukawa Motohisa, Chairman of the Tax Commission, Democratic Party for the People, said, "We have made a proper calculation and have a basis for it. I think the ball is in their court." They are not going to budge from the 1.78 million yen line. Behind this is the position of the Komeito Party. The Democratic Party for the People also met with the Komeito Party in the evening. This meeting started in a gentle mood. The Komeito Party has shown a certain understanding of eliminating the "wall." Discussions on specific tax measures will begin in earnest next week, jointly by the three parties of the Liberal Democratic Party, Komeito, and the People's Party. ■The "1.3 million yen wall" that causes loss of work The Komeito Party also wants to simultaneously advance discussions to review other "walls." This is the "social insurance wall." When your annual income exceeds 1.06 million yen or 1.3 million yen, depending on the size of your workplace, you are no longer considered a dependent of your spouse and are required to pay social insurance premiums. This "social insurance wall" means that your take-home pay will be significantly reduced by the payment of insurance premiums for the Employee's Pension Insurance and the National Pension. The Constitutional Democratic Party of Japan also aims to eliminate this "wall." It has submitted a bill to the Diet to compensate for the loss of income due to social insurance premiums for people with an annual income of up to 2 million yen. Kazunori Yamai, Deputy Chairman of the National Affairs Committee of the Constitutional Democratic Party of Japan: "In addition to the 1.03 million yen barrier, there is also the big 1.3 million yen barrier. I think we need to solve the 1.3 million yen barrier as well." The "1.3 million yen barrier" has hindered the workplace, and it is difficult to create employee shifts. Gomi Mamoru, President of Super Izumi: "(Q. Looking at the time card and adjusting the schedule) Yes. Look at the time card. If it is decided that it will exceed 1.3 million yen, you have to rearrange (the shifts). Employees will also have to enroll in social insurance, which will reduce their take-home pay. I feel that it is very difficult." ■ Two barriers for "1.06 million" and "1.3 million" ◆ The "social insurance barrier" is when an annual income exceeds a certain line, and you are obligated to pay social insurance premiums, that is, health insurance and pensions. There are two income barriers, 1.06 million yen and 1.3 million yen. The "1.06 million yen barrier" applies to people who work at companies with 51 or more employees, and if they exceed a certain requirement, they are obligated to enroll in health insurance and employee pension insurance. Your take-home pay will decrease. However, there are also benefits such as an increase in your future pension and the ability to receive sickness and maternity benefits. Many people feel that the "1.3 million yen barrier" is a "bigger barrier," and on the 13th, the Constitutional Democratic Party of Japan submitted a bill to the House of Representatives to address the issue. The target is people who work for companies with 50 or fewer employees. The big problem here is those who are dependent on their spouse. If their income exceeds 1.3 million yen, they will no longer be dependent on their spouse. When that happens, they will have to pay national pension and national health insurance. If your annual income is exactly 1.3 million yen, it will be about 280,000 yen per year. These barriers have caused part-time and casual workers to refrain from working, which has become a problem. As a countermeasure, the government has introduced a "support package" since October last year. Let's take a look at the "1.3 million yen barrier." Even if your income increases "temporarily" due to an extension of working hours, etc., if your employer can prove that it is "temporary," you can continue to remain dependent on your spouse. However, this is generally limited to a maximum of two consecutive years. The 1.06 million/1.3 million yen barrier is not just an economic measure such as "reducing work," but also an issue related to the social insurance system. Nomura Research Institute executive economist Takahide Kiuchi points out that "there is a need to change the social insurance system to suit the times." "For example, the idea of ​​supporting a spouse is based on the assumption that the spouse is a full-time housewife. In order to fundamentally resolve the 1.06 million/1.3 million yen barrier, we need to change the social insurance system from a household-based to an individual-based system that is more suited to the times, in other words, a system in which all working people join and pay insurance premiums." He adds, "However, when the social insurance system is changed, some people will lose out. Time-consuming discussion is needed to consider fairness, etc." [TV Asahi News] https://news.tv-asahi.co.jp