As a countermeasure against the declining birthrate, there are calls for the introduction of the so-called "N-divided-N-squared method," which is a system adopted in France that reduces the income tax burden of households as the number of dependents such as children increases. It was also discussed in the Japanese Diet.

How will the amount of tax payable change if the N/N method is introduced for income tax?

I summarized it in detail.

I will watch it at home with my husband and two children.

For both husband and wife, taxable income after deducting insurance premiums from income is 4 million yen per person.

Spouse is 6 million yen in total of 2 million yen.

Income tax in Japan is levied on an individual basis, so the combined tax amount for a married couple is 475,000 yen.

What will happen if the same family becomes the N minutes to the N power system?

In the case of the "N minutes to the power of N method", the major difference is that tax is imposed on a household basis.

In this method, after adding up the income of one household, the total income is divided by the number of people "N" including children, and the tax amount per person is calculated based on that figure.

It is a mechanism to determine the amount of tax payment of income tax by multiplying the number of people "N" again.

What would happen if a family with the same couple and two children became an N-for-N-squared system?

As in France, where the system is introduced, if the number of children up to the second child is 0.5, the number corresponding to "N" is "3".

If you calculate your income tax with this, it will be 167,500 yen less than the current tax amount.

If the number of children increases, the number corresponding to "N" will increase, so the tax amount will decrease further.

On the other hand, in the case of a married couple with two children and only one of them working, the income tax is 772,500 yen for the same income of 6 million yen.

In the case of this family as well, the income tax will be 307,500 yen under the N-divided-to-N method, so the income tax will be reduced by 465,000 yen.

## Finance and tax experts

Hitotsubashi University professor Susumitsu Sato, who specializes in finance and taxation, said, "Japan's income tax is a progressive tax, so it's cheaper to spread your income among your family. It seems that there is an intention to reconstruct the

On top of that, he said, ``The ``N-divided N-th power method'' makes it difficult for progressive taxation to function. If you don't change the tax rate, you'll have to go as far as reviewing the tax rate.I think it will take a long time to introduce it."