The fourth Rutte cabinet has not been granted a quiet start. After the panic about the shattered expectations regarding gas extraction, it is now all hands on deck at the Ministry of Finance as well. The Supreme Court’s Christmas verdict on the levy on wealth is putting a lot of pressure on taxation for this year and threatens to lead to billions of dollars in claims with retroactive effect. The new man on the post, CDA member Marnix van Rij, will soon have to show what he is worth.
It is an accident that many tax specialists have seen coming for some time. Since 2017, tax legislation has assumed that people save less and invest more the higher their wealth. That principle ignores the fact that there are also prudent wealthy people who simply keep it with a savings account. There are also less fortunate investors who do opt for shares but do not achieve the return that the tax authorities are counting on. In both cases, it may happen that the state collects more tax than the capital produces annually. This is contrary to the intention of the House of Representatives, but also to fundamental rights such as the undisturbed enjoyment of property and the prohibition of discrimination. People should be able to decide for themselves what to do with their money and not be forced by the government to switch to risky investments. It was not.
The matter is sour because the current ‘wealth tax’ came after the second Rutte cabinet in 2016 ignored the desire of the House of Representatives to finally start taxing the actual return achieved in the Netherlands. So on an individual level. Because that didn’t happen before 2017 either, although the consequences for cautious savers were less severe then than now.
But the House got zero on the bill. It was getting too complicated, the cabinet warned. It would only lead to complicated legislation, implementation problems and lengthy legal proceedings. The alternative has now failed again. The department now considers the situation so serious that it has already stopped levying the savings tax for this year altogether, pending a solution to the damage of recent years.
And so the shore turns the ship. Perhaps the greatest lack of Rutte IV’s coalition agreement is that again no serious attempt is made to really reform the tax system, while no fewer than two government parties (D66 and the ChristenUnie) had elaborate plans for this. Moreover, a majority of the House of Representatives has agreed on the diagnosis for years: the system, with all its allowances and deductions, is rotten, too complicated and it contributes too little to employment. Labor is overloaded and wealth and pollution too light. Nevertheless, during this cabinet term, it threatens to remain a patchwork again.
Threatening, because there is a way out. After all, the ministers are expected to make their own policy program this winter on the basis of the coalition agreement. If Van Rij was not yet convinced that he should at least prime a new tax system, the Supreme Court will now hopefully get him to that point.
The position of the newspaper is expressed in the Volkskrant Commentaar. It is created after a discussion between the commentators and the editor-in-chief.