Why This Japanese Salaryman (Who Will Pay $20K+ in Inheritance Tax) Actually Defends It

A well-known Japanese actress’s daughter recently made news by renouncing her inheritance.

What struck me wasn’t the news itself, but the public reaction. Almost everyone discussed inheritance tax negatively — how to avoid it, how unfair it is, how to minimize it.

I disagree. Strongly.

I think Japan’s inheritance tax is one of our most important taxes. And I think people who grew up in low-income families — which includes me — should be the first to defend it.

Let me explain why.

Quick Japan Context (vs US/UK Inheritance Tax)

For readers from outside Japan, the inheritance tax landscape looks very different here:

• US Federal Estate Tax: Only kicks in at $13.6M+ per individual (2024). Under 0.1% of estates pay it.
• UK Inheritance Tax: 40% rate above £325K threshold. About 4% of estates pay it.
• Japan: Progressive rates up to 55%, but with a smaller basic deduction (¥30M + ¥6M × heirs). 10.4% of estates paid it in 2024 — and rising.

In other words, Japan’s inheritance tax hits a much broader swath of ordinary middle-class families than the US or UK version. A Tokyo homeowner with a paid-off apartment and modest savings can easily trigger it. This is why it’s a live political issue here, and why almost all mainstream financial advice focuses on avoidance rather than justification.

I’m going the other way in this article.

It’s Now a Tax on 1 in 10 People, Not Just the Wealthy

Most people still think of inheritance tax as “something the super-rich deal with.” That’s outdated.

Japan’s National Tax Agency reported that in 2024, 10.4% of estates were subject to inheritance tax. That’s the first time ever exceeding 10%.

Year	Share of estates taxed
2014	4.4%
2024	10.4%

The 2015 reform cut the basic deduction by 40%. For a family of spouse + 2 children, the deduction dropped from ¥70M to ¥42M.

In Tokyo, a house worth ¥35M + ¥15M in savings + ¥10M life insurance = ¥60M estate. That crosses the threshold easily. This is firmly middle-class territory now.

My Own Calculation at ¥50M in Assets

Let me run the numbers on myself. FP Grade 2 certified, putting theory to use.

Current assets: about ¥50M. Breakdown: ¥35M home, ¥15M financial assets. Heirs: spouse + 1 daughter.

Item	Amount
Total assets	¥50M
Basic deduction (¥30M + ¥6M × 2)	¥42M
Taxable	¥8M
Inheritance tax (after spousal deduction)	~¥0

Nearly zero if I died today. Japan has a strong spousal deduction — up to ¥160M to a surviving spouse is tax-free.

But here’s the thing. I’m investing ¥370K/month. By my 60s, assets likely hit ¥100M.

Item	Amount
Total assets	¥100M
Basic deduction	¥42M
Taxable	¥58M
Tax (after spousal deduction)	~¥3M

About ¥3M between wife and daughter. Is that “too much” or “fair”?

I think it’s fair.

The View From Someone Whose Family Never Had Money

Here’s the personal part.

I’ll inherit almost nothing from my parents. They were never wealthy. My family was struggling most of my life.

To this day, I’m not receiving support from them — if anything, I’m the one buying things for them. The cash flow runs the opposite direction.

That’s the foundation of why I support inheritance tax.

The family you’re born into determines your starting position in life. A kid who inherits ¥50M at 30 starts in a completely different place than a kid who inherits zero. That gap doesn’t close through “hard work.” It’s too big.

Inheritance tax chips away at that gap. Takes a slice of what passes between generations and redirects it to public services and education. Won’t eliminate inequality — but prevents it from compounding forever.

Without this tax, wealthy families keep getting wealthier across generations, and families like mine keep starting from zero. Permanently.

Income Tax Is Way Harsher

People complain inheritance tax is too high. Compared to income tax, it’s not.

Japan’s income tax tops out at 55% (including local tax). Anyone earning over ¥9M annually is paying 30%+ marginally. I groan at my withholding slip every year.

Inheritance tax effective rates are much lower:

Estate value	Tax (spouse + 2 kids)	Effective rate
¥70M	¥1.1M	1.6%
¥100M	¥3.2M	3.2%
¥150M	¥7.5M	5.0%
¥200M	¥13.5M	6.8%

Even a ¥100M estate pays just 3% effective. Someone working a job and paying 25-30% income tax every month has every right to say: “wait, death gets taxed lower than labor?”

The current system is harsh on workers and lenient on holders. I think the balance should tilt the other way.

My Actual Proposal: Lower Gift Tax, Raise Inheritance Tax

Here’s my opinion, clearly stated.

Under current rules, my daughter won’t see her inheritance until I die. She’ll be in her 50s by then — past child-rearing, past home-buying, past education costs. Exactly when she needs money least.

At that point, the money just gets parked and passed to the next generation. It doesn’t circulate.

If instead she received support in her 20s or 30s — raising kids, buying a home, starting a business — the money flows into the actual economy. Consumption, investment, family formation. All things Japan desperately needs.

So my proposal:

• Lower gift tax → money can flow earlier to younger generations
• Raise inheritance tax → reduce frozen assets that never circulate

Money moves across generations more freely, and wealth concentration gets checked.

But the government is moving the opposite direction:

• Inheritance tax: 40% deduction cut in 2015 (more people now subject)
• Gift tax: 2024 reform extended lookback from 3 years to 7 years (harder to use)

Both are getting harder to work around. The exact opposite of my preference.

What I Plan to Give My Daughter

So what am I actually doing?

No annual gifting right now. My daughter is 8. She doesn’t need large sums yet.

I’ll use “Kodomo NISA” (a new 2026 child investment account) — partly for returns, partly for education. I want her to experience “money compounding on its own” early.

The big transfers will be tied to life events:

• When she buys a home → Use home-purchase gift exemptions
• When she has kids → Direct education payments (non-taxable under Japanese rules)
• Child-rearing years → Support as needed

Goal: give her the conditions to have and raise children. Not tax-optimized gifting. Generation-building gifting.

Japan’s demographic collapse won’t be solved by individuals. But my daughter shouldn’t be crushed by child-rearing costs just because a policy choice was made wrong.

You Don’t Have to Be Pessimistic About This Tax

Here’s the main thing I wanted to say.

Most inheritance tax discussion online sounds like “I don’t want to pay” and “how do I avoid this.” Understandable. No one enjoys taxes.

But people from low-income backgrounds should be the first to support this tax. Because without it, wealthy families compound wealth forever, and families like mine start from zero every generation. That’s how inequality becomes permanent.

I reached ¥50M in assets because of timing (low-rate era, index investing worked), luck, and a dual-income household. Not inheritance.

I want to give my daughter the tools to build her own wealth — not a system where she’s saved by inheritance. And that requires society not becoming too unequal in the first place.

Inheritance tax is part of what keeps that from happening. If paying ¥3M when I die means society stays a little more fair, that’s worth it.

There’s more to this topic than just “how do I avoid it.”

This article reflects personal views and calculations, not tax or investment advice. Please consult professionals for your specific situation.