What to do with the taxable income deduction system based on a spouse's income level will be one of the key issues in discussions by the government and the ruling parties on tax reform for fiscal 2017. The scheme, which gives a tax benefit to married couples if a spouse — in most cases the wife — earns less than a certain amount, has been criticized for lowering women's motivation for work. The ruling coalition is leaning toward either abolishing or scaling back this deduction. But the system represents only one of many causes that hamper women's full-scale entry into the labor market, while changing it will have major repercussions on both households and businesses. People involved in the discussions should carefully weigh both the merits and demerits of changing the system.

Under the system introduced in 1961, ¥380,000 is deducted from the taxable income of the head of a household if his or her spouse earns ¥1.03 million or less a year. It has been pointed out that this leads housewives with part-time jobs to limit their work days and hours so their income will not exceed the threshold — and allow their husbands to keep the taxable income deduction. It has therefore been cited as a ceiling that limits women's roles in the labor market.

It has also been called an obsolete system dating back from the days when husbands were the sole breadwinners in a majority of families. In fact, the number of wage-earning households where both wife and husband have paid jobs topped those where only the husband works 20 years ago. The number of households where the wife had no job fell from 11.14 million in 1980 to 6.87 million last year — and that of households where both wife and husband had jobs grew from 6.14 million to 11.14 million over the same period.