On the surface, it looks like an attractive deal: Raise your workers' pay by 3 percent and your company qualifies for a substantial tax break.

But a closer look suggests that Prime Minister Shinzo Abe's policy actually raises the bar for companies to benefit from an existing framework of tax breaks, to 3 percent wage increases from 2 percent — and as a result it will likely fail to drive up compensation.

Most businesses are simply unwilling to hike wages that much, wary of committing to driving up ongoing costs for a temporary, three-year tax break.