Regarding Tuesday’s article, John writes:
In the U.S., besides the federal income tax, we have a number of other less obvious taxes such as the state income tax, social security tax, sales tax, property tax, capital gains tax, inheritance tax, etc. Based on your article, the reader might assume that the other taxes are either the same or better in Japan. But I wonder if you could confirm that.
There are cultural advantages of living in the U.S. One is the idea of upward mobility, where hard work and education can compensate somewhat for social status and family background. Another might be tolerance of diversity, where there is much more tolerance of people that are “different” than in other countries. (Certain parts of the U.S. excepted, of course.) I wonder how Japan might compare in these areas.
The quality of the government is somewhat related to the quality of the electorate. In the U.S., the majority of eligible voters don’t vote. Those that do vote for someone they “like” and often choose likeability over suitability for the job. American voters are not well-informed in general when compared with voters in other countries. How would you describe Japanese voters?
Estate and inheritance tax rates are roughly the same in both countries: 20%-50% in Japan and 18%-46% in the U.S. The U.S. is more lenient on the exemption, however, with a level at $3.5 million next year compared with Japan’s roughly $500,000 level plus $100,000 per heir.
Property taxes in both countries are also similar at around 1% of appraised value. Japan has no Social Security tax, and its sales tax is only 5%. California’s base sales tax rate is 7.25% and gets as high as 8.75% in some areas. In New York City, the sales tax rate is 8.4%. In Alabama, it’s 10%. In Anchorage and Fairbanks, Alaska there’s no sales tax, but in other parts of Alaska it’s as high as 7%.
In general, Japan is more financially friendly than the U.S. Part of that is due to the culture of paying cash. Paying cash makes people keenly aware of monthly outflows. Credit cards and easy consumer lending have all but killed American household balance sheets. It’s easy for banks to say that they never forced people to get in over their heads, but neither did tobacco companies force people to take a puff. At some point, I think the American financial services industry will require more regulation to protect citizens who just can’t grasp that financing daily life at 18% is stupid.
Banks are not innocent. They know what they’re doing. Look at their advertising. It’s created an image where borrowing to get things is cool — America’s famous consumer culture. Gotta have those shoes, gotta have that designer jacket, gotta have that car, and so on. All of it financed, mind you.
I’d love to see a national campaign of saving before buying, where the cool guy is the one who walks up to a cash register and laughs when asked “Cash or credit?” He pulls a money clip from his pocket, slaps down some greenbacks, looks the clerk in the eye, and says, “Real men pay cash.”
As for other cultural issues, yes, there’s the sense in America that if you work hard on your dreams, you will succeed. That’s probably the best part of the culture, and the one I’m most fond of. That trait of America is widely admired.
In Japan, there’s a more regimented outlook. People are realistic in their dreams even from childhood. Ask American kindergarteners what they want to be when they grow up and you’ll hear fireman, superhero, and movie star. In Japan, you’ll hear pastry shop worker, teacher, and city hall clerk. The sad truth is that probably the same percentage of people in both countries end up in the same socioeconomic groups, but the Japanese accept early on where they’re headed. Americans first dash the childhood dream on the rocks, and then end up toiling somewhere.
This, however, is not the fault of the country. The human condition is unavoidable. It’s just a fact that there can’t be many people in Matt Damon’s shoes, but they’re can be a lot in county clerk shoes.
As for tolerating diversity, Japan hasn’t really needed to do so. The country is 99% Japanese. Anybody not Japanese is known to be a foreigner, forgiven for mistakes, and otherwise seen in a curious light. I find such curiosity to be charming and welcome the chance to show that I can eat local foods, use chopsticks, speak the language, and such. Other foreigners I’ve met here are frustrated with the curiosity and wish people could just see people as people.
The predictability of first conversations with Japanese people does get tiresome after a while. I’ve wanted to meet new people with this opener, just to save time: “My name is Jason Kelly, I’m from America, I’m 37 years old, I’ve lived here for six years, yes I do sometimes miss my mother but I talk to her often, yes I can eat fermented soybeans, thank you for complimenting my Japanese, yes it is a hard language, and no I don’t mind that you can’t speak English.”
The quality of the electorate in Japan is low, in my opinion. People don’t care about politics much because every politician makes the same promises and fails to deliver them. Also, people don’t elect the prime minister directly the way Americans elect the president, so there’s a literal distance from the process that takes away some of the excitement.
Campaigns in Japan are absurd. They consist of a candidate driving around town in a van with loudspeakers repeating, “Hello, I’m [NAME]. Please vote for me. Hello, I’m [NAME]. Please vote for me.” Who could get excited about that?
The strength and weakness of Japan is that people do precisely what they’re told to do. If it’s not in their job description to have an opinion on something, they won’t. The old joke here is that the quickest way to silence a roomful of Japanese people is to ask what they think about something. They don’t know, so they won’t say. Silence.
As you can see, there are quite a few differences between the countries. On this site, I focus on financial subjects most of the time and, financially, Japan is the better place to live.
Culturally, I love both countries. I have a wonderful life here in Japan, filled with friends, breathtaking nature, exciting cities, good food, and gentleness in the air. When I go to American a few times per year, I have fun hearing everybody’s opinion, listening to forceful conversation, seeing the latest movies, catching the coolest fashions, and spending time in my beloved Rocky Mountains.
I sometimes wish Japanese people had more backbone. I sometimes wish Americans had more consideration. Mostly, though, I’m just glad to live on such a fascinating planet!
