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

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.