The government and the ruling coalition parties are reportedly mulling raising income taxes on high-income company employees while offering tax breaks for freelance workers by adjusting taxable income deductions. While it seems to make sense to bridge the taxation gap deriving from differences in how people work, whether the income threshold for tax hikes is appropriate should be carefully considered.
Japan's postwar income tax system has long been based on a standard household model in which the husband is a company worker on lifetime employment and the wife a homemaker. That model no longer applies to many Japanese families.
In the economic doldrums following the collapse of the bubble boom in the early 1990s and as the domestic market's prospects clouded with the declining population, companies began hiring fewer regular full-time employees. Today, people on irregular job statuses such as part-timers account for roughly 40 percent of the workforce. Meanwhile, the number of freelancers is on the rise. Also growing are the ranks of women who keep working after having children.
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