Social insurance potentially being added to financial income

[Kiro]

Has anybody been following this topic? The government potentially considering this.

This would open Pandora’s box for things like “we only said Nisa was tax free, and social insurance is not a tax” or for company employees having to pay both on salary and financial income like dividends, capital gains when selling could increase it by a lot.

It’s “in discussion” and not set in stone, but quite scary.
This would feel like such a betrayal/backstab on the new nisa…

https://www.moneypost.jp/1139257

[RetireJapan]

Eeeek. This would... mess up my plans somewhat

[Deep Blue]

This is the unfortunate reality of living in Japan. The Governments fiscal situation is horrific, the stock of debt is terrifying and the demographics mean it’s going to get worse and worse.

Japan seems to have a very strong socialist view on taxes where the rich get taxed hard to support everyone else. This policy change would seem a logical extension of that.

Japan isn’t unique - most developed countries have this issue - but Japan is further down the line and unless it embraces immigration it’s hard to see a solution.

[Deep Blue]

Social insurance is capped out I think? There is a maximum anyone pays and someone earning 100 million/year will pay the same amount as someone earning 200 million/yen?

[VG1]

Yes the maximum public health insurance premium is capped. This cap depends on where you live (locally decided) but this is quite high. 1.2 mio where I am.

[RetireJapan]

Just checked for Miyagi and this will not make all that much difference after all. Phew.

[VG1]

Thanks for your article. It is something I had been thinking about recently and was sort of expecting due to the reason explained by Deep Blue in his post.
I would be surprised if they did it for NISA as it would be so contradictory.
But I would be much less surprised if they decided this for taxable accounts.
Actually, I already have to pay the 12% public insurance premium on my dividends and capital gains realized on my stocks held abroad. I also had to pay when I sold real estate recently.

[Deep Blue]

Yes the maximum public health insurance premium is capped. This cap depends on where you live (locally decided) but this is quite high. 1.2 mio where I am.

Yes, that’s what I thought. Before I turned seishian I remember it was 99k a month.

[Tkydon]

Yes the maximum public health insurance premium is capped. This cap depends on where you live (locally decided) but this is quite high. 1.2 mio where I am.

The Caps are the same nationwide.

The breakdown of how the total NHI Contribution is calculated is locally decided with Per Household, Per Insured Person and Income related components to the maximum of the National Limits:

The Household Caps are:

1. For medical care (Basic fund for the National Health Insurance)
Maximum Household Limit: 650,000 yen

2. For support (Financial support for the Medical Insurance System for the Elderly Aged 75 and Over)
Maximum Household Limit: 220,000 yen

3. For nursing care (Nursing-care insurance premiums for people aged 40 to 64)
Maximum Household Limit: 170,000 yen

[adamu]

Two things are certain in life...