.Akio KAWATO
In today’s advanced economies, discussion of “inequality” has become almost constant. Manufacturing has declined, while finance, IT, and other sectors increasingly concentrate income in the hands of a relatively small elite.
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In the United States, the top 10 percent of earners now receive roughly 45–50 percent of national income. In Britain, the figure is around 35–40 percent; in Japan, about 30–35 percent (ChatGPT, UNDP estimates). Measured by the Gini coefficient—where zero represents complete equality and one represents complete inequality—the United States stands at roughly 0.39–0.42, Britain at 0.34–0.36, and Japan at around 0.32–0.34.
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The political consequences are visible everywhere. Lower-income voters, frustrated by stagnating living standards, increasingly support populist politicians promising redistribution or national protection. In the United States, that means Donald Trump. In Europe, parties such as Alternative for Germany in Germany and National Rally in France have grown by channeling public anger—often less by solving economic problems than by redirecting frustration toward foreigners, immigrants, or external enemies.
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Yet the Rich Already Pay Most of the Income Tax
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The other day I came across figures that made me do a double take. Americans often complain that the wealthy evade taxes through loopholes and aggressive accounting. Yet according to the Internal Revenue Service and related data, the top 1 percent of earners pay roughly 40–45 percent of all US federal income tax revenue, while the top 10 percent pay well over 70 percent.
That, incidentally, explains why affluent Americans are perpetually demanding tax cuts and fiercely resisting tax hikes intended to fund expanded welfare programs.
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Japan is somewhat harder to measure because detailed tax data by income bracket are limited. But there are statistics for those who file tax returns directly. According to surveys by Japan’s National Tax Agency, people earning more than ¥10 million annually account for roughly 60 percent of income tax payments. Include everyone earning more than ¥4 million, and the share rises to nearly 75 percent.
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The real question is how much salaried workers—most of whom never file individual tax returns—actually contribute overall. Here Japan’s resident tax becomes important. Unlike national income tax, local resident taxes are not strongly progressive. As a result, lower-income households often feel the burden more acutely. (Me too.)
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Then come social insurance premiums: pensions, health insurance, and long-term care contributions. These further intensify the sense of unfairness among lower- and middle-income workers because the contribution ceilings mean that, proportionally speaking, higher earners eventually pay a smaller share of their income.
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To be fair, Japan’s healthcare system remains comparatively equitable and relatively inexpensive. Unlike in the United States, medical bankruptcy is rare. But even here, younger and healthier working-age Japanese—who tend not to need much medical care in the first place—often feel they are paying heavily into a system from which they receive relatively little.
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