‘In other countries, either the assets themselves are taxed or the income from assets’, confirms university lecturer in tax law Reinier Kooiman (University of Amsterdam). “But not something in between, like we do.”
That is, if the wealth – the property itself – is still taxed, because in many countries the wealth tax has been phased out or even abolished over the past forty years. ‘Why? Because of the changing zeitgeist’, says Kooiman. ‘In order to stimulate the investment climate, capital was spared. Only recently has it been more about taxing power more heavily. Last year I commented on a report by the OECD on, among other things, inheritance tax, as a means of combating wealth inequality. I was one of the few. While an OECD report on tax avoidance by multinationals gets hundreds of responses.’
Staggering Tax Office
Many countries that do tax wealth have numerous exceptions, such as the owner-occupied home, says Kooiman, who, in addition to his academic position, also works for the consultancy firm Deloitte. Even in apparently egalitarian Scandinavia, the tax burden on wealth is not high: the rates on property income usually do not exceed 30 percent and there is usually no inheritance tax or separate wealth tax. ‘The wealth inequality is therefore relatively high, with relatively low income inequality,’ says Kooiman. “Just like us, actually.”
According to the scientist, wealth inequality is increasing everywhere across the border, because wealth is placed in private limited companies, for which the tax has become lower and lower. A progressive tax on property income is the best way to combat the growing wealth inequality, says Kooiman, referring to the OECD report, in addition to a higher inheritance tax.
According to Bas Jacobs, all actual capital gains, such as interest and dividend, should be taxed, including private capital gains. Almost all member states of the European Union already do this in one form or another, the economist recently wrote in the trade journal ESB. The Netherlands is a major exception, including Cyprus, Luxembourg and Malta. But is it possible to tax the actual revenues with this faltering tax authorities? Jacobs: ‘I’ve been hearing that argument for so long that I’m starting to get tired of it. Other countries can do it too, so do something about it, I’d say.’