The news is about the strengthening of taxation on financial income.

I have researched and considered the issue of 'taxation on financial income,' which has become a topic in the Liberal Democratic Party leadership election.

In a nutshell, it is about '20.315%.'

The discussion about 'strengthening taxation on financial income' has been on and off because the wealthy have financial income, but there is no progressive tax system like income tax, so the tax rate decreases when they exceed the '100 million yen barrier,' which is advantageous for the wealthy.

It seems that the Kishida administration initially considered the matter but withdrew it.

Looking at history, it has gone from the era of 'comprehensive taxation' to the introduction of 'separate taxation' to the gradual increase of tax rates. In 1999, both capital gains and dividends were taxed at 10%, in 2003 it was 20%, and in 2013, it became the current 20.315%.

So, the discussion is about whether it will increase to 25% or 30% in the future.

People who cannot fill the NISA (Nippon Individual Savings Account) limit for a lifetime will not be affected by this, so they don't need to worry about it in that sense.

I don't plan to fill up my lifetime NISA limit, but I have US dollar-denominated bonds, so I will be affected by the interest. However, since the amount I hold is not that large, the impact is minimal in terms of the amount.

However, from a macro perspective, there may be impacts on the cash flow of companies with a large proportion of financial assets and on the investment behavior of institutional investors, which can indirectly affect the general public to some extent.

So, as an individual, considering that there is not much impact, I looked into the extent of the impact on tax revenue.

According to the total tax revenue for fiscal year 2019 (national tax only) of 58.4 trillion yen, the taxable financial income is 5.7 trillion yen (dividends 5 trillion yen, capital gains from stocks 0.7 trillion yen).

If the tax rate is increased by 10%, it would result in a tax revenue increase of 3 trillion yen, which is quite impactful.

Countries like the United States, the United Kingdom, and France have progressive taxation on financial income, while countries like Germany and Japan don't have it, and countries like Singapore don't impose taxes, according to the source.

I see, researching about it deepens the thinking process.

Rather than raising consumption tax, which has less impact on tax revenue, the tax rate on financial income is likely to increase first, as it has less impact on people's lives.

Consumption tax is also expected to increase eventually.

When we hear terms like "strengthening taxation" and "tax increases," we tend to react defensively. However, upon investigation, we realize that they don't have much impact on the lives of ordinary people, so it's important to calmly accept these changes.