Starting in fiscal 2026, the “Children and Child-Rearing Support Gold” system will begin, marking a de facto tax hike through increased medical insurance premiums. Any claim that this is an “increase in social insurance premiums and not a tax hike” is a mere deception; for the citizens, the impact is identical.
The excuses provided by Mr. Kishida when introducing this system were appalling. He persisted in the sophistry that because wages are rising, the “net burden would be zero.” Any nominal wage increase should be interpreted as an agreement reached between business owners and workers in response to cost-push inflation. It is utterly preposterous for the Kishida/LDP-Komeito administration—which has done virtually nothing to contribute to economic growth—to try and claim credit for it. Furthermore, the reality is that real wages have declined for three consecutive years since the year following the birth of the Kishida administration. Enough said. In a lecture on May 25, 2025, Kishida reportedly stated, “Increasing take-home pay through wage hikes is the proper path, rather than changing the tax system.” This suggests he fails to grasp the fundamental difference between nominal and real values. He likely believes the nominal wage increase is his achievement, but it is his administration that has impoverished the lives of the people by reducing real wages. He has absolutely no right to lecture anyone on wage hikes.
Regarding child-rearing support, I believe that no additional taxes or social insurance premium hikes should be implemented; instead, the funding should come from the issuance of government bonds. Here are the reasons why. (Note: In the following points, “taxes” includes social insurance premiums.)
1. From the Perspective of Pro-Expansionary Fiscal Policy If a policy is judged to be beneficial for the economy in either the long or short term, the government should confidently issue bonds. This aligns with the principles of expansionary fiscal policy. In my view, as long as the current account is in surplus and net foreign assets are positive, there is not a shred of reason to hesitate in issuing bonds. Given that citizens are already struggling under rising prices, a tax hike is out of the question.
2. From the Perspective of Fiscal Hawks Even if one adopts the logic of a fiscal hawk, this system only makes sense if the total “taxes” paid in the future by the additional children resulting from this policy (specifically, their discounted present value) exceeds the costs of the support system itself. If it doesn’t, then the policy shouldn’t be implemented in the first place.
Total future “taxes” from additional children > Cost of the child-rearing support system
If this inequality holds, the policy is essentially “profitable” for the state. Therefore, financing it through bond issuance is perfectly justifiable and does not constitute “passing the debt to future generations.” To repeat: if this formula does not hold, the policy is flawed from the start. Yet, Kishida and the LDP/Komeito are attempting to cover the costs by stripping money away from the current working generation. This repeated pattern of behavior is precisely what prolongs economic stagnation and, ironically, accelerates the declining birthrate.
This is a crucial point: much like national defense, long-term initiatives like this are inherently suited for bond financing. This is because future generations are the primary—or at least equal—beneficiaries. Conversely, forcing current pensioners to bear the burden for benefits that won’t materialize for another 20 years (when those children start working) is highly problematic. Coupled with the ongoing degradation of the pension system, this only heightens future anxiety in our country. It is clear that pensioners are not the beneficiaries here; this policy treats the elderly with contempt. Senior citizens should be much more outraged at the LDP and Komeito.
This “Kishida Tax Hike” must be rescinded. I do not know if any party has made this a central campaign promise, but it is disappointing that it has hardly even become a topic of debate in this House of Councillors election.
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