Archive for the ‘Family matters’ Category

Proposed inheritance tax exemption isn’t really about inheritance taxes

Thursday, February 21st, 2013

Indirect beneficiary: High school in Gunma Prefecture

Indirect beneficiary: High school in Gunma Prefecture

The whole point of a consumption tax is that everyone, rich and poor alike, bears it equally according to ability, though in truth the poor bear more since a greater portion of their spending is for necessities. The government understands this even if it isn’t admitting as much. News reports are saying that the ruling coalition of the Liberal Democratic Party and the Komeito have decided to discuss whether or not certain items, such as food, will be subject to either smaller or no increases in the consumption tax by the time it is set to be raised to 10 percent in 2015, though they aren’t guaranteeing any exceptions. In any case, the initial increase to 8 percent that takes effect next year will proceed without any exceptions.

Nevertheless, the LDP thinks it has to throw taxpayers a bone of some sort, which is one of the explanations being given for the inheritance tax exemption that goes into effect in April for three years. It’s generally believed that Japan’s tax on legacies is punishingly high, though in fact only 4 percent of heirs ever pay it. If it seems high it’s probably because people who live in Tokyo, where the media is concentrated, tend to pay the lion’s share of inheritance taxes owing to much higher property values, but even in the capital only 9 percent of heirs ever pay inheritance tax.

However, families of means or those with property are worried since the government has announced that its goal is to raise the national portion of inheritance tax payers to 6 percent. In addition, the income tax burden for the highest tax bracket may be increased from 40 to 45 percent. Older people with money are said to be rushing to public lectures by investment experts to find out how they can pass on more of their assets to their children and grandchildren.

So the government came up with this exemption, which is exclusively used for education. Grandparents can give up to ¥15 million to each grandchild to pay for education-related expenses without the recipient having to pay a gift tax. In order to claim the exemption, the grandparent must deposit the money in an account that has been opened expressly for this purpose in a trust bank. The grandchild or parent/guardian can then withdraw the funds whenever they are needed for educational purposes, but in order to do so they must submit a receipt before withdrawal showing how the money is being used.

Continue reading about inheritance tax exemption →

Government says all single parents not created equal

Saturday, February 2nd, 2013

Edit!: Guideline for widow exemption from English language Income Tax Guide for 2009

Last fall a single mother living in Osaka started a petition to get the city government to reduce the fees she paid for daycare. Her argument is based on the widow’s exemption (kafu kojo), which is granted to certain people on their income tax returns. Though many single parents qualify for the exemption, this woman does not. The exemption only applies to women whose husbands are dead (or missing) or who are divorced, regardless of whether or not they have children.

According to an article in Tokyo Shimbun, the petitioner was engaged to get married, but during her fifth month of pregnancy her fiancee got cold feet and left her. It was too late to get an abortion, so she quit her job in Tokyo and moved back to her parents’ home in Osaka. Three months after giving birth she started working part-time, and later secured full-time regular employment. Consequently, her income increased, and thus she had to pay more for daycare since the center where her child was enrolled determines fees based on income.

In Japan “income” (shotoku) is considered to be the amount of money on one’s tax return after all exemptions and deductible expenses are subtracted. Because this woman is not a widow or a divorcee, but rather a single mother who has never been married, she doesn’t qualify for the exemption, which is either ¥350,000 or ¥270,000, depending on circumstances. And since she can’t take the exemption, her income is higher, and thus she pays more for daycare.

The Japan Federation of Bar Associations agrees with the woman, but actually goes further by saying that the law itself is unfair since it discriminates against certain types of single parents. As the name of the exemption attests, it was not originally enacted for the benefit of single mothers but rather for widows. The law went into effect in 1951 to help thousands of women whose husbands were killed in the war. Since then the law has been revised several times. It was expanded to include divorced women with children, and then divorced women without children (but who weren’t getting alimony).

Continue reading about single parent exemptions →

Theme parks make a comeback thanks to grandma and grandpa

Wednesday, November 14th, 2012

Ho-hum. Tokyo Disneyland and Tokyo Disney Sea recorded another record season. Between April and September, Japan’s favorite theme parks were visited by 13.25 million people, a 23 percent increase over the same period last year, which is understandable given that “self-restraint” was the order of business in summer 2011 after the earthquake and tsunami. Still, that’s an impressive increase under any circumstances since it translates as an operating income of ¥39 billion — double last year’s — and a net profit of ¥25.5 billion — triple last year’s.

Yumiko Yamashita! You are the 100 millionth visitor to Universal Studios Japan!

But TDL isn’t the only theme park that did well this summer. According to the Nihon Keizai Shimbun, attendance at Universal Studios Japan in Osaka was up 19.5 percent during the same period, Tokyo’s Toshimaen amusement park saw an 18.7 percent rise, Yomiuri Land in western Tokyo 30 percent, Nagashima Spa Land in Mie Prefecture 3 percent, Fujikyu Highland in Shizuoka Prefecture 4 percent, and even the Dutch theme park Huis Ten Bosch in Kyushu, which almost went bankrupt before being bought by travel agent H.I.S., enjoyed an 11 percent year-on-year boost in attendance from Jan. to June.

Could all this healthy leisure spending be explained by a post-disaster recovery bump, as theorized by Sankei Shimbun? A recent segment of the TBS noon-time wide show “Hiruobi” looked into the matter and found that there’s something else involved, namely a confluence of demographics that has resulted in wider-open wallets. The program sent a reporter to Universal Studios to cover the 100 millionth admission and found that a good portion of park attendance was made up of families of three generations, with the youngest layer comprised of very young children and the oldest of grandparents who are recently retired but still relatively young and, more importantly, have a lot of savings they’re only too happy to spend on their grandkids. “My grandma buys me anything I want,” said one little girl without shame.

Continue reading about theme-park repeaters →

Want more daycare? Pay workers more

Friday, November 2nd, 2012

Let’s nurture: Daycare center in northern Chiba Prefecture

The Health, Labor and Welfare Ministry just released the results of a survey on quitting. Among the various categories of employment studied, education proved to be the field with the highest percentage of turnover: 48.8 percent of first-time teachers quit their jobs within three years of being hired. Though the study didn’t give reasons for the high turnover rate it isn’t difficult to figure out: Teaching children is a high-stress occupation with little monetary reward.

The same goes for a subset of education, daycare, which continues to pose a very real problem. The lack of daycare facilities for children not old enough to attend school is one of the main reasons young couples are not having more children. According to a recent feature in Tokyo Shimbun, the main reason there are not more daycare centers is that, while demand is increasing as more women remain in the workforce after giving birth, there aren’t enough hoikushi (nursery school teachers). And the reason there aren’t enough hoikushi is that wages are bad and getting worse.

The average monthly pay for a hoikushi, regardless of age or experience, is about ¥200,000, which is almost 40 percent lower than the average monthly pay across the board. But hoikushi tend to work longer hours than the average worker, especially since the Child Welfare Law was revised in 2001, thus allowing more private companies to set up for-profit daycare centers. Average pay for daycare workers dropped after 2001, and private centers tend to hire staff on a non-regular basis, meaning no benefits. According to HLW Ministry statistics, there were 1.12 million licensed daycare workers in Japan in April 2012. However, Tokyo Shimbun reports that few of these people actually work in daycare.

Continue reading about nursery school teachers →

Money for education ends up in the toilet

Thursday, October 4th, 2012

Every elementary school student’s dream

Last month the Organization for Economic Cooperation and Development released statistics from 2009 related to the cost of education in 31 developed countries. For the third year in a row, Japan was the lowest in terms of portion of GDP spent on education and schools: 3.6 percent, which, while being 0.3 percentage points higher than in 2008, is still much less than the average, 5.4 percent. (Denmark, for the record, spends the most: 7.5 percent.) Not surprisingly, Japanese families spend more for college than anyone else in the world, and in terms of how much of the money spent on education was from private individuals, Japan ranked third at 31.9 percent (after Chile and South Korea). The world average is 16 percent.

In addition, the Ministry of Internal Affairs reports that in 2010, the year the ruling Democratic Party of Japan did away with tuition for public high schools, the average family with a full-time salaried head of household still spent 5.7 percent more for education than it did the year before. In the same class of households that had high school or college students, the increase was 9 percent.

On average, a household spent ¥1.91 million a year on education, down ¥700,000 from the previous year probably owing to the tuition break. That’s about 37.7 percent of the average family’s yearly income, and the poorer the family, the greater the burden: for families that earn ¥2 to ¥4 million a year, the portion spent on school is 57.5 percent. And if you wonder where all this money goes, don’t blame teachers, whose average salary over the past ten years has decreased by 9 percent.

It also doesn’t seem to be going to school infrastructure. The education ministry says that 60 percent of all public elementary and junior high schools in Japan are at least 30 years old and have never been renovated. In major cities such as Tokyo and Osaka, the portion is 70 percent. The part of the physical plant that tends to show its age the most are the restrooms. In fact, Japanese public school lavatories are infamous, as evidenced by all the J-horror movies that take place in them. Invariably they are described with “the 3 Ks” — kusai (smelly), kitanai (dirty), kurai (dark).

Continue reading about public school lavatories →

New stats about old folks

Wednesday, September 19th, 2012

With the rapid aging of society it pays to pay attention to all the latest economic statistics regarding old people, and lately we’ve come across quite a few. Here are some new numbers about households in which the designated head-of-household is 65 or older, carried in the Asahi and Tokyo Shimbuns.

Keep on pushin’

  • The average monthly income in 2011 was ¥185,000, which is about ¥3,000 less than the average in 2010.
  • About 90% of total income is in the form of government and company pensions.
  • Average spending is ¥221,000 month, meaning that the average household is ¥36,000 in the hole.
  • However, in 2011 average savings for households when there are at least two people stood at ¥22.57 million. Savings among seniors has been increasing gradually since 2008, but the statistic may be misleading since it is heavily weighted toward upper income households newly entering the senior demographic. Median savings is ¥14.6 million.
  • 5.44 million people over the age of 64 worked in 2011, which represents 27.6 percent of the nation’s population over that age; 46 percent of men and 26 percent of women between the ages of 65 and 69 worked.
  • Total number of people over 64 exceeded 30 million in 2011, with 50,000 over the age of 100.
  • As reference, in 2005, when the number of elderly was slightly over 26 million, about 2.2 percent were collecting welfare. The average monthly welfare payment for two-person elderly households in Tokyo was ¥122,000 and for outside of Tokyo ¥94,500. About 47 percent of elderly who received welfare also received some sort of government pension, at an average of ¥46,000 a month.

Package funeral services take the (financial) sting out of dying

Thursday, August 30th, 2012

Funeral hearse

Your ride’s here

The Tokyo metropolitan government  has launched a jumokuso service for individuals. Jumokuso means “tree funeral.” For a fee, a person can have his or her ashes buried at the foot of a tree planted in a special park in Kodaira. The financial advantage of this particular burial model is that the person pays only once. Most remains are interred in family graves located in graveyards that are managed by either local governments or religious entities. Graveyards require kanriryo (administration fees) in perpetuity.

In principle, a jumokuso customer will have his ashes mixed with other customers. It costs ¥134,000 for roughly cremated remains and ¥44,000 for remains that have already been reduced to ash (a more involved and thus more expensive process). Enough space for 10,700 people is being planned for the park, and the first group of 500 “plots” was recently sold via lottery. There were 8,169 applicants.

Obviously, many people are not attached to the traditional Japanese style of burial any more, and it probably has a lot to do with the traditional funerals that go with it, which can be extremely expensive. A recent Asahi Shimbun article described a woman in her 60s who was shocked when she received the bill for her husband’s funeral. The funeral service company had quoted ¥1.7 million for the whole thing, but the invoice came to ¥2.6 million.

Continue reading about the funeral business in Japan →

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