Benefits of Living in Japan

Barry wrote:

I lived in Japan when I served in the military, and liked it a lot. I’m just curious, in your case does the pleasant culture make up for the high expenses?

While Japan is more expensive than other parts of Asia, it’s not as expensive as most Americans think. The days of $20 hamburgers are long gone, down the same toilet that flushed away the stock market in 1989. Nobody bathes in golden tubs anymore, either.

In fact, once you take taxes, health care, and transportation into consideration, Japan is usually a cheaper place to live than the U.S.

Say you make a paltry $100,000 per year in America and are thus in the 33% tax bracket. After the U.S. federal income tax alone, you’re taking home just $76,277. (The tax bracket percentage applies only to the last dollar you earn. You don’t subtract 33% from $100,000 as you’d expect. That’s way too simple. You have to deduct the rising percentages from the lower amounts earned until you arrive at your last dollar. Details here.)

State and local taxes vary, but lop off about another 20% for most folks in the fat part of the bell curve. That takes you down to $61,022. That would be fine if you received something useful for the taxes you paid, except that the only thing American taxes buy you is another war somewhere. Really. Glance back through recent history. The military industrial complex manages to arrange a war at all times to justify the exorbitant cost of a military that’s so advanced it can wipe out any country on the planet. Too bad it was unable to protect the World Trade Center.

Let’s look at that more closely, because I think it’s important to understand why most people can’t get ahead in America.

The Iraq War costs $378 million per day to operate. That’s $138 billion for fiscal 2007. The war did not catch those responsible for 9/11, nor reduce the terrorist threat, nor secure access to plentiful oil fields. The only thing the war has done for you is jack up the price you pay for gasoline. Plus, bear in mind that the $138 billion per year is just for the operation of the war. It has nothing to do with the standard military budget, which continues uninterrupted at more than $600 billion per year, and growing. The U.S. military budget accounts for about 45% of global military spending, by far the highest percentage of any country. You’re paying for that. The number two country, China, accounts for just 5% of global military spending. Just the operating budget of the Iraq War would have provided 39,000,000 Americans with health care last year. That’s shown here. As is, though, your taxes pay only for the war that raises your gas prices. You get no health care, or much of anything else for that matter.

Overall, some 41% of your taxes pay for wars that do you personally no good. Not since World War II has it been possible to argue that a U.S. war has been for self defense. Every war in my lifetime has been either for defense contractor benefit or a nebulous and quickly forgotten goal.

So, your $100,000 per year loses 39% in basic taxes to become $61,000 due largely to the expensive burden of paying for America’s never-ending wars. In Japan, that same $100,000 earned would lose only 19% in basic taxes to become $81,000. Keep in mind that Japan’s tax system is among the most expensive in the world, yet it’s still far less ravaging than America’s. Plus, Japanese people actually derive some benefit from the taxes they pay.

Now, let’s expand the rising price of gasoline thought for a moment. Why do you need to buy gasoline to begin with? Because America has no public transportation to speak of. If you want to go from point A to B, you’re doing it in an expensive, inefficient car powered by ever more expensive gas. Almost like somebody’s running this show deliberately, eh?

A typical car payment in America is around $500 per month. Gas runs another $100 to $400 per month depending on a number of factors, but let’s go with $150 to be conservative. Then there’s America’s insurance racket. Unlike Japan, which has a national auto insurance plan that covers everybody buying a new car, America requires you to seek out your own insurance from the nearest rip-off artist with a new ad. Oh, and you have to pay registration tax every year or the cops will pull you over and charge you another transportation-related fee.

Add it up and you’re paying $500 for the car, $150 for the gas, $100 for the insurance, and $50 for the registration for a grand total of $800 per month. In Japan, you would be able to reduce your monthly transportation budget to about $100 with convenient trains and buses that are clean and pleasant, unlike the dirty, dangerous buses that pass for public transportation in big American cities — if they’re available at all. In most places in America, a personal car is the only method of transportation.

Let’s see how we’re doing as Americans so far. Our $61,000 per year is $5,080 per month. We have to pay $800 for transportation, which brings us to $4,280. Then, because our runaway taxes pay for wars but not health care, we have to find a health insurance plan. That’ll take another $500 per month at least, getting us down to $3,780. Housing expenses vary widely, but let’s say that rent or a mortgage plus utilities and property taxes will be at least $1,500 per month, bringing us down to $2,280.

In Japan, the same $100,000 would be worth $81,000 after basic taxes, which is $6,750 per month. You’d lose only $100 to transportation, bringing you down to $6,650. Your health care is already covered by the taxes you pay, but there might be a small premium for special services, so let’s deduct another $100 per month to get down to $6,550. Contrary to popular opinion, most housing in Japan outside of the most expensive parts of Tokyo and Osaka is cheaper than its American equivalent. A fine apartment can be had for $600 per month, and a typical home mortgage payment with all taxes included is just $800 per month. Even with utilities, we’re looking at just $1,000 per month maximum housing expenses for most places in Japan, bringing our monthly income down to $5,550.

Now, a lot of Japanese people choose to buy their own cars. Here, too, Japan is better. A great car can be bought for $10,000 and few people pay more than $100 per month in gas. Almost nobody knows what a car payment is because they buy their cars with cash here.

Where would you rather earn your $100,000? An annual income that should make you rich leaves you decidedly middle class in the U.S. with a monthly net income of just $2,280. In Japan, you’d pocket $3,270 more. No wonder Japanese people pay for almost everything with cash. That reminds me — I didn’t even touch on the runaway credit card problems in America.

To sum up, it is decidedly not expensive to live in Japan. It could even be seen as a way of reducing the U.S. tax burden and fleeing to a place that has a social infrastructure. For me, though, it’s not that. I still pay (a lot of) taxes in America after an excessive amount of time spent preparing and defending my income with the help of an accountant.

In Japan, I simply walk to City Hall, hand cash to the clerk, and watch as she checks my name off in a ledger book and tells me to have a good day. I’m not kidding. Life can be that simple, folks.

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One Comment

  1. Mandy
    Posted November 26, 2013 at 5:37 am | Permalink

    Now all I need to do is learn fluent Japanese and I can move!

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