自民党総裁選 金融所得課税 増税の是非が争点の１つになるか!?

Financial income taxation refers to the tax on gains from stock transfers and dividends. Currently, the tax rate for financial income is set at a flat 20% (15% income tax and 5% resident tax). *Currently, the reconstruction tax of 0.315% is added, making it 20.315%.

Prime Minister Kishida was considering reviewing this tax system at the time to balance growth and distribution. Specifically as follows.

Tax rate increase:Proposal to raise the flat 20% tax rate

Progressive taxation:Proposal to progressively levy taxes on high-income earners

Due to the current financial income taxation being a flat 20%, the problem of the "0.1 billion yen threshold" has arisen, where the tax burden on high-income earners is relatively light. This refers to the situation where high-income earners with a high proportion of financial income can obtain profits at a constant tax rate without being subject to progressive taxation.

Progressive taxation of salary income:For salary income, the tax rate increases as income increases, with a maximum tax rate of 45%. On the other hand, financial income is taxed at a flat rate of 20%, so there is a phenomenon where the tax burden rate decreases when income exceeds 100 million yen.

Prime Minister Kishida aimed to eliminate the "100 million yen barrier" by reviewing the taxation of financial income and increase redistribution to the middle and lower income groups. However, there are also concerns that raising the tax rate on financial income could lead to the following:

Increase in stock sales:Possibility of an increase in selling stocks before the tax increase

Avoidance of investment:Fear of a widespread trend of refraining from stock investments

In the case of progressive taxation, it is expected that tax revenue will increase for high-income earners, but the scale may be small, and further discussions will be needed for specific policies in the future.

As the election of Prime Minister Kishida is expected, the stock prices are declining.
Before that, there was excessive optimism towards the new president, which led to a sudden reversal of the rise and even called it the 'Kishida shock'.

While the revision of taxation on financial income is not the only factor causing the stock price decline, it has become a selling point due to concerns about individual investors avoiding investments.

Mr. Ishiba expressed his intention to re-examine the increase in taxation on financial income that Prime Minister Kishida wanted to pursue, but to implement it

This is a challenge, and in fact, there is a need to even discuss reducing financial income taxation, even on a temporary basis, all while facing the argument for reverse taxation increase.

Why"It is unfair that the wealthy have an advantage." Why would they come up with the "increase in taxation" notion first?
Why"Tax system that benefits the middle class." Doesn't it go in the direction of promoting it?

In the end, theThe base is the desire to increase taxesand"The advantage to the wealthy is unfair" is just an afterthought etc

So, when it became clear three years ago that Mr. Kishida was likely to be chosen, all expectations for a new party leader and a new government were completely shattered.

And from there, until Mr. Buffett came to Japan on April 12, 2023, and the Japanese stock market boomed, for a year and eight months, the Japanese stocks were unable to rise in range. In the end, there were no broad policies under the Kishida administration to boost stock prices.

The current phase is that Buffett is selling stocks and converting them into cash, which may lead to a cycle of low stock prices in the medium to long term. In such a situation, if a new president emerges and starts saying things that remind us of the nightmare from three years ago...

In the midst of deflation, it may become a reproduction of the foolishness of increasing the consumption tax against the trend of the world and causing a long-term economic downturn in Japan.

Japanese stocks are entering a phase where the upside is heavy, as concerns about interest rate hikes and a strengthening yen from narrowing Japan-US interest rate differentials emerge. If a new prime minister raises the issue of increasing financial income taxes, overseas and institutional investors will likely reduce their weight in Japanese stocks for a period of 1 to 2 years.

Unfortunately, Japanese stocks seem to be entering a phase where they don't chase after higher prices, but rather pick up high-dividend stocks and quality stocks that have fallen, and regularly take profits by returning to cash when they rise.