Tax and Social Insurance Burden on Households: Estimate Using National Survey of Family Income and Expenditure

Taro Ohno, Masahiko Nakazawa, Kazuya Matsuda, Kazuaki Kikuta and Tomoko Masuda
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Taro Ohno: Associate Professor, Faculty of Economics, Management and Information Science, Onomichi City University; Senior Visiting Researcher, Policy Research Institute, Ministry of Finance
Masahiko Nakazawa: Associate Professor, Institute of Economic Research, Kyoto University
Kazuya Matsuda: Visiting Researcher, Policy Research Institute, Ministry of Finance
Kazuaki Kikuta: Researcher, Policy Research Institute, Ministry of Finance
Tomoko Masuda: Former Researcher, Policy Research Institute, Ministry of Finance

Public Policy Review, 2014, vol. 10, issue 3, 457-480

Abstract: This paper uses micro household data from the National Survey of Family Income and Expenditure by the Ministry of Internal Affairs and Communications in order to assess the actual status of the tax and social insurance burden on households. To identify the structure of the burden on a lifetime basis, it is necessary to compile data by lifetime income bracket. Based on the life cycle hypothesis, consumption may be used as a proxy variable for lifetime income. In recent years, efforts have been made to estimate the lifetime burden through this approach. However, consumption on items that require very large one-time spending cannot be equalized over a life cycle. Therefore, this paper estimates the burden through a similar approach while taking account of consumption indicators that better reflect lifetime income. As a result of this analysis, it was found that if looked at on a lifetime basis, (1) the earned income and resident and consumption taxes are progressive, (2) pension, health insurance and long-term care insurance premiums are generally proportional and (3) the earned income and resident taxes are less progressive than seen on a point-in-time basis.

Keywords: households; micro data; tax burden; social insurance burden (search for similar items in EconPapers)
JEL-codes: H24 H55 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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